By Alexandra Valencia

QUITO, Reuters – Thursday’s proposal by Guillermo Lasso, Ecuadorean president, to modify tax reforms was presented Thursday by the Economy Ministry. This would allow for higher contributions by high-earning firms and generate $1.9B in the first two years.

Lasso’s omnibus tax, investment, and labor bill was rejected by the legislature. He is an ex-banker who assumed office in May without any discussion in September.

The government will split the rejected bill in three, and send them to congress with an urgent request.

Minister of Economy and Finance released a statement Thursday night stating that “this legal reform is consistent with the principles of tax justice and progress and it’s anticipated that its approval will result in the collection of over $1.9 billion in two years.”

To fulfill the promise made by Lasso that people with higher earnings would be paid more taxes, the tax bill now increases the number businesses subject to the special tax contribution at 0.8% over two years.

New proposal preserves controversial measure, which increases tax obligations to those who earn more than $2,000 per month. However, it reduces their ability to deduct health care and education expenses.

The reform would apply to individuals with more than $1million in assets and couples who have more than $2million together.

Lasso’s new financing agreement with the International Monetary Fund is critical to tax reform. The Fund plans to examine the country’s fiscal program in December, ahead of the planned $700 million disbursement.

Although the government claims it is committed to reducing the Andean’s deficit fiscal, which has been estimated to be $4.8 billion at most, they have struggled to make economic reforms in the face of political and social opposition.