Implications of the Foreign Currency Outflow Tax (ISD) on Ecuadorian Business Competitiveness, 2023–2024

Abstract

Rising costs associated with international transactions pose a significant challenge to business competitiveness in dollarized economies such as Ecuador, where dependence on imported inputs shapes the productive structure. In this context, the Foreign Currency Outflow Tax (ISD) has generated debate regarding its effects beyond its revenue-generating role. This study aimed to analyze the impact of this tax on business competitiveness during the 2023–2024 period using a quantitative approach based on secondary data from official sources. A descriptive analysis of foreign trade variables was conducted, along with an exploratory correlation and simple linear regression analysis to identify potential relationships. The results show an increase in ISD revenue accompanied by rising import costs, suggesting a direct relationship between the tax burden and corporate cost structures. However, the limited number of observations constrains the robustness of inferential analyses, so findings should be interpreted with caution. It is concluded that the ISD may indirectly affect business competitiveness, highlighting the need to extend the study period for more robust results.