Key facts
- Chile's Congress approved a sweeping economic and tax reform package.
- The legislation aims to boost economic growth through tax cuts and investment incentives.
- The Senate approved the bill by a narrow margin of 26 votes to 23.
- The reform includes phasing down the corporate income tax rate from 27% to 23% over four years.
- It also grants up to 20-year tax stability for large investments.
Chile's Congress has passed a significant economic and tax reform package championed by President José Antonio Kast, aiming to stimulate growth in the world's largest copper producer. The legislation, which includes corporate tax cuts and investment incentives, secured approval in the Senate by a narrow margin of 26 votes to 23.
The reform will phase down the corporate income tax rate from 27% to 23% over four years, aligning Chile with OECD averages and attracting investment. It also includes up to 20-year tax stability guarantees for large-scale investments, a measure intended to draw foreign capital. The bill's passage comes amid economic contraction and rising unemployment in Chile.
The legislation faced significant political polarization, with key votes passing by the minimum threshold required. The estimated annual fiscal cost of the corporate tax cut alone is approximately $1.8 billion, raising concerns about fiscal sustainability. The bill's journey through Congress involved prior approval of most provisions by the lower house before the final Senate vote.