Parliament approves Kast's vetoes on opposition additions to his mega-reform

Chile's Chamber of Deputies has endorsed President José Antonio Kast's vetoes on three key amendments proposed by the opposition to his government's sweeping tax reform bill. The decision, made on Monday, means the legislature will reconsider the original proposals as presented by the executive branch.

The vetoed amendments pertained to crucial aspects of the reform: the right to financial oblivion for debts, the prohibition of charging interest on accrued interest (anatocism), and measures to ensure 30-day payment terms for small and medium-sized enterprises. The government, through the Minister of Finance Jorge Quiroz, argued that while the opposition's ideas seemed beneficial, their practical implementation could lead to adverse consequences, citing concerns previously raised by the Central Bank and the Financial Market Commission.

This legislative maneuver allows the executive to reassert its agenda, as a presidential veto compels Congress to revisit the disputed clauses. The broader tax reform package aims to reduce corporate taxes from 27% to 23%, offer VAT exemptions on home purchases, provide fiscal benefits for capital repatriation, and freeze tax rates for large investments. The government anticipates the reform will stimulate economic growth, lower unemployment, and balance fiscal accounts.

However, the reform faces further scrutiny. Several opposition lawmakers have petitioned the Constitutional Court to review the constitutionality of the tax invariability clause and certain environmental regulations within the bill. The court has accepted these challenges and has a seven-day deadline to issue a ruling. The government hopes for the reform's approval before September to present its first budget by year-end.