The Internal Revenue Service (SRI) has recovered $9.3 million for the state following the annulment of two judicial decisions that had previously benefited private companies through actions deemed illegitimate by authorities.
In November 2024, SRI reported to the Attorney General’s Office that certain judges had engaged in illicit conduct, resulting in financial harm to the tax administration. According to SRI, these judges used protection actions to nullify tax obligations that already had final and binding sentences. The agency stated this was due to collusion between lawyers, taxpayers, and justice system operators.
As a result of these complaints, the Constitutional Court overturned two rulings issued by the Labor Chamber of the Provincial Court of Justice of Guayas. These decisions had required SRI to pay millions to two companies for alleged rights violations. The Constitutional Court found there was clear abuse of law in these cases.
One case involved Koval Management Kovmanag S.A. (“KOVMANAG”). The court ruled that judges violated legal security by accepting a protection action with clearly inadmissible claims (Ruling No. 2012-22-EP/25). As a result, KOVMANAG and those involved must return $6,822,613.33 that they received improperly.
The second case concerned Constructora Carlo Poggi Barbieri S.A., where provincial judges disregarded a prior judicial decision on the same matter—an act considered a violation of res judicata. In this instance, the company must return $2,516,854.86. The court also declared that magistrates acted willfully and ordered referral of the case file to the Attorney General’s Office for possible criminal investigation (Ruling No. 3374-22-EP/25).
The tax authority called on all judges in Ecuador “to guarantee correct application of law so citizens and institutions can access honest and transparent justice.” It also warned it would “continue taking all necessary measures to protect public resources belonging to Ecuadorians against unjustified attempts at obtaining undue compensation through ‘negotiated’ judicial rulings.”
According to SRI, “This pronouncement from the Constitutional Court aligns with principles established in the new Organic Law on Public Integrity promoted by President Daniel Noboa Azin, which requires justice system officials to act with impartiality, ethics and responsibility.” The law aims to eliminate practices undermining legal integrity and eroding public trust in state institutions.
SRI concluded: “Judicial corruption not only affects tax administration but directly threatens rule of law and collective interest… SRI reiterates its commitment to collaborate with relevant authorities so those who abuse legal tools for private gain are sanctioned.”
