Last Sunday, the former presidential candidate and founder of the Republican Party, José Antonio Kast, was categorical about his position and that of his community regarding the tax reform: “We have been of one line, on tax issues we are in favor of lowering taxes . If Chile Vamos or the Confederation of Production and Commerce (CPC) want more taxes, we don’t,” he said in an interview with Channel 13.
Yesterday, Monday, Chile Vamos distanced itself from JA Kast’s position and began to talk about the need for dialogue with the Government, evidencing its willingness to sit down at the table to try to reach agreements in the short and medium term. Meanwhile, the Minister of Finance, Mario Marcel, ratified the commitment that the Executive will insist on the processing of the reform project during 2023.
And it is that, despite the harsh political defeat suffered by the ruling party last Wednesday in the Chamber of Deputies and Deputies, the contingency opens new spaces for dialogue around a tax reform that brings together new key actors, such as the business sector, that now he would have a better disposition to talk. Similarly, the three political parties that make up Chile Vamos (UDI, RN and Evópoli) now emerge as actors that could be transcendental in the final destination of this reform. The issue is how much these parties will be willing to talk and compromise in the search for said agreements with the ruling party.
From the Independent Democratic Union (UDI) they say “to be available, but not for a bad tax reform”, as reiterated by its helmsman, Senator Javier Macaya. Likewise, the parliamentarian stressed that the reform was rejected with the votes of the ruling party itself, for which reason – in his opinion – the responsibility for its failure, one of the emblematic reforms of the Government of President Gabriel Boric, is not attributable to the opposition. .
In Renovación Nacional (RN), meanwhile, they recalled that eight months ago –together with the parliamentary bench of the UDI– they proposed to the Government to separate the discussion on tax reform, when it was just beginning, with the purpose of first approving everything related with tax evasion, avoidance and extension, plus royalty mining and, in this way, quickly obtain financing for the Universal Guaranteed Pension (PGU). At that time, the ruling party did not support this initiative.
On the possible requirements of his sector to support a project of this nature, the deputy and head of the RN bench, Frank Sauerbaum, assured that the important thing was to obtain the necessary resources. “We hope to present a reform that is tax collection, but also presents elements that have to do with the motivation of investment and the generation of jobs to face the recession that we are experiencing,” he pointed out.
For his part, the senator from Evópoli and also a member of the Finance Committee of the Upper House, Felipe Kast, believes that, from now on, the Government should change its focus and build an agreement in favor of economic growth, investment and job creation. “I think that today advancing on a tax reform without worrying about economic growth would be a profound mistake, and that it would damage the quality of life of Chilean men and women. I hope I can imitate what Ignacio Briones did in the midst of the pandemic – when he called a the best economists in Chile– and, in this way, transform this defeat into a great opportunity”, stated the parliamentarian.
Provision of the business sector
The business sector also showed signs of willingness to discuss the tax reform and this is what explains why José Antonio Kast directly questioned the Confederation of Production and Commerce (CPC) in his intervention in Channel 13. Susana Jiménez, vice president of the CPC, was clear on Sunday in an interview with The Mercury, when he pointed out that “what was rejected is not the idea of a tax pact, it was a proposal that had many deficiencies”.
For his part, the former president of the CPC, Juan Sutil, also insisted on dialogue and, in this sense, indicated that what happened in the Chamber opens an opportunity for the political and business world to seek a broad pact: “This is a great opportunity to change the reform and the tone of the discussion, and to think that we have to build a country that unites us all. We have to make good reforms that allow us to reach agreements on tax, fiscal, modernization of the State and pensions issues”.
Another sign of support for dialogue in the private sector was that of the general manager of Quiñenco (holding company of the Luksic group), Francisco Pérez Mackenna, when on Wednesday, after leaving a seminar organized by McKinsey and when asked about his rejection of the idea of legislating, he pointed out that the “subject is still on the table” and, although he admitted that he did not like the project, he added that it was important to reach a reform that would achieve consensus: “I think that what has to come now is dialogue (…). That country projects, which are long-term, to solve problems that will accompany us for many years, belong to everyone and not to one sector or another,” he said.
Pérez Mackenna mentioned the need to solve long-term issues: “Solving social problems is not a short-term task. One can solve a specific problem through an emergency solution, but not when it comes to defining the financing of Chile’s social program for the next 40 or 50 years”, he concluded.
