Chilean Government, PPD Agree on Staggered Tax Stability

Chilean Finance Minister Jorge Quiroz announced a surprise agreement between the government and the Party for Democracy (PPD) on the contentious tax invariability clause, a central piece of the administration's sweeping reform package. The deal, revealed Wednesday in a joint press conference at the National Congress, unblocked a critical legislative hurdle just days before the bill's general vote in the Senate.

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We have presented a text. The government has picked up, I would say, 90% of our proposal on this matter. This is the central point: that the tax invariability will not be for 25 years, but for 10 years, and that 10 years depends on the entry barrier to different modes, up to 100 million dollars; that there is a second point that can be up to 15 years and there the entry barrier is up to 350 million dollars; and, if it is for 25 years, it has to be an entry barrier of 500 million dollars.

Senate President Paulina Núñez of Renovación Nacional was credited as the architect of the rapprochement. The new formula, developed in collaboration with the PPD, significantly alters the government's original proposal. Instead of a fixed 25-year period of tax stability, the agreement introduces a staggered system tied to investment levels. "We have presented a text. The government has adopted, I would say, 90% of our proposal on this matter," said PPD senators' committee head Ricardo Celis. He explained that the tax invariability would now range from 10 years for investments up to $100 million, to 15 years for investments up to $350 million, and up to 25 years for investments exceeding $500 million.

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I hope it is an impulse so that, on other issues, we can achieve more support.

Celis also noted the inclusion of a permanent 1.5% surcharge as a premium and confirmed that mining projects would not be exempt from royalties. The agreement surprised other opposition factions, including the Broad Front (Frente Amplio) and the Socialist Party (PS), who had been preparing to challenge the tax provision before the Constitutional Court. Núñez expressed hope that this successful collaboration would encourage further bipartisan support on other legislative matters. Minister Quiroz emphasized that the Reconstruction Law is strengthened by this opposition backing and called for continued efforts to find common ground based on "serious proposals, not for a ring or for the cameras."

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continue finding common ground on the basis of serious proposals, that are not for a ring or for the cameras.