QUITO, Dec 29: Ecuador’s constitutional assembly late on Friday approved a wide-ranging tax reform bill introduced by President Rafael Correa that has put him at odds with influential politicians and business leaders.

The assembly controlled by Correa’s party made minor changes to the bill that will force companies to make anticipated payments of their income tax, and impose a 0.5 per cent duty on capital outflows and special levies on unproductive lands.

The new law will also slap a 70 per cent windfall tax on future revenues generated by mining companies above a set contractual price, sparking worries in the nascent sector.

The same tax, which is not retroactive, will also be applied to oil companies in future contracts.

The 130-member assembly, which has up to eight months to draft a new constitution, in November closed down Congress and took over its powers to pass legislation.

Opposition leaders claim the new law will increase taxes on the poor majority and middle-class, and strip funds assigned to local governments via income tax donations.

Some influential mayors including Jaime Nebot, the mayor of the country’s business hub Guayaquil and a leading opposition figure, have protested the changes and have threatened more street demonstrations.

Business leaders have threatened not to comply with new taxes and say the policies would erode the country’s economy that is expected to grow only 2.65 per cent this year.—Reuters