Tax reform is centered on three points: a tax on individuals according to their assets; a royalty for mining companies; and a new environmental tax mechanism edit
Sputnik – In a ceremony at La Moneda Palace, in Chile, President Gabriel Boric presented this Friday (1st) an ambitious tax reform project.
Alongside his finance minister, Mario Marcel, the Chilean president presented the initiative, which aims to raise almost US$ 12 billion (R$ 63.9 billion) annually over the next four years, which would mean an increase of 4, 3% on current gross domestic product.
Chilean tax reform is centered on three points: a tax on individuals according to their assets; a royalty for mining companies; and a new environmental tax mechanism.
The president also wants pardon for “Credit with State Guarantee”, a public policy used by thousands of low-income students to pursue a university education. According to calculations, its implementation would mean a disbursement of around US$ 8 billion (R$ 42.6 billion) to the Treasury.
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“This is a project that is subject to democratic discussion in the Chamber of Deputies and the Senate, where we hope to have the goodwill of parliamentarians so that we can take this reform within the established deadlines”, appealed Boric.
He defended the importance of securing “a new fiscal pact to advance towards a more sustainable development in social, economic and environmental terms, and to build a more dignified country for all”.
With the reform, the Chilean government wants to raise pensions for retirees; improve the health system; create an emergency housing plan; implement a productivity plan to support small and medium-sized companies; and promote the equitable development of Chile’s regions.
According to him, “97% of taxpayers will not be affected by a tax increase”, and the tax changes are mainly aimed at the wealth of the richest”.
The reform proposes a tax increase for those earning more than US$ 4,300 (R$ 22,929) per month, establishing a system of installments that increase in relation to the amount.
Second, a wealth tax will be created that will tax the people with the greatest wealth in Chile. According to government calculations, this tax will affect 6,300 taxpayers.
People who have a net worth of up to US$5 million (R$26.6 million) will be charged a 1% fee, and those who have more than US$15 million (R$79.9 million), 1.8 %.
This payment will be collected annually for four years and will be considered all assets: real estate, financial instruments, investment portfolios and any money they have both in Chile and abroad.
Chile’s tax reform also establishes taxes on the exploitation of copper, the country’s main export product.
Companies that produce more than 50,000 tonnes of fine copper will have to pay a fee of between 1% and 2% of their profits, a fee that rises as the amount of material mined increases.
In addition, the reform eliminates some of the tax exemptions established by current legislation: it modifies the corporate tax and proposes green taxes aimed at reducing emissions, accompanied by a subsidy plan to promote responsible business behavior.
The reform also includes some tax cuts, for example for people caring for minors or people with severe degrees of dependency.
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