Key facts
- Chile's Chamber of Deputies approved the majority of a major economic reform bill.
- The bill aims to boost investment by reducing the corporate tax rate and offering tax stability.
- It includes a reconstruction plan for wildfire-affected regions.
- Opposition and environmental groups have raised concerns and plan legal challenges.
- The legislation now proceeds to a joint congressional committee.
SANTIAGO, July 21 (Reuters) - Chile's lower house of Congress has approved the majority of a significant economic reform bill, a key initiative by President Jose Antonio Kast aimed at stimulating investment in the world's largest copper producer. The legislation, known as the "Law for National Reconstruction and Economic and Social Development," modifies 36 laws and 15 decrees. It now advances to a joint congressional committee to address a single rejected article.
The bill is central to Kast's strategy of strengthening public finances through deregulation and market-friendly policies. Key provisions include a phased reduction of the corporate tax rate from 27% to 23% by 2029, and offering 10-year tax stability for investments of at least $50 million, extending to 20 years for projects exceeding $350 million.
Finance Minister Jorge Quiroz expressed satisfaction with the broad cross-party support for the measures. However, the bill's path to becoming law may encounter further challenges. Opposition legislators have indicated they will appeal certain provisions to the Constitutional Court, and the government is considering vetoing some legislative amendments.
The reform package also encompasses a reconstruction plan for regions affected by devastating wildfires in January, along with property tax exemptions for seniors and expense reimbursements for projects previously hindered by environmental concerns. Chile's main business lobby, the Confederation of Production and Commerce (CPC), has endorsed the bill, citing the certainty and regulatory simplification it offers investors.
J.P. Morgan highlighted the law as the year's most significant political catalyst for the local stock market, though consultancy Teneo cautioned about potential contentious implementation due to a polarized debate. Environmental groups have voiced criticism, particularly regarding provisions that ease the relocation of salmon farming concessions, which they argue constitutes a privatization of natural resources without adequate assessment.