Chilean Senate Approves Major Economic Reform Package

Chile's Senate has approved a sweeping economic reform package championed by President José Antonio Kast's administration, a move aimed at revitalizing the nation's growth through significant tax reductions and investment incentives. The legislation, passed in the early hours of Thursday, now proceeds to the Chamber of Deputies, where the ruling right-wing coalition commands a majority, for its final legislative step.

“

Chile needs to grow, and this project makes it possible.

Key provisions of the reform include a phased reduction of the corporate income tax rate, from the current 27% down to 23%, bringing it closer to the average observed in developed economies. Additionally, the bill establishes a 20-year freeze on tax conditions for investments exceeding $350 million, designed to provide greater stability and predictability for large-scale projects. "Chile needs to grow, and this project makes it possible," stated Finance Minister Jorge Quiroz following the vote.

However, the reform has drawn sharp criticism from the left-wing opposition. Senator Beatriz Sánchez warned that each percentage point reduction in corporate tax represents a loss of $420 million in state revenue. Concerns about the fiscal impact are echoed by public opinion, with a Cadem poll indicating that 56% of Chileans disagree with the proposed tax cuts. Another contentious measure allows for the reimbursement of investments to companies whose environmental permits are revoked by judicial decisions, a provision the government defends despite opposition backlash.

“

Each percentage point reduction of the tax represents 420 million dollars less for the state's collection.

Adding to the debate, the government has revised its economic growth projections downward, now anticipating an average annual growth of 3.5% by 2030, a decrease from the previous 4% forecast. While the International Monetary Fund (IMF) acknowledged the reform's potential to boost economic growth, it also cautioned about potential pressure on public finances. "It's not very worthwhile. Although there may be more investment, it is also important that the state has resources for health, education, and other benefits," commented Ariela Jofré, a 21-year-old kitchen assistant in Santiago.

“

It's not very worthwhile. Although there may be more investment, it is also important that the state has resources for health, education, and other benefits.