This week, in the Finance Committee of the Chamber of Deputies, the discussion will continue on the first package of measures of the tax reform promoted by the Government, whose first bill was submitted last Thursday to the office of parts of the low camera. A proposal for President Gabriel Boric is actually that of a tax agreement that, in his opinion, is essential for financing other reforms, such as pension or health systems. From the Executive they consider that it is the pillar of their program, where they hope to collect 4.1% of GDP, progressively, within a period of four years.
Changes in personal income taxes, restrictions on tax exemptions, measures to combat avoidance and evasion, the creation of a wealth tax, the disintegration of systems and modifications to the royalties miner. These are the main axes of a reform that has –in principle– an application schedule of four years and that, in addition, contains a series of measures that will imply a structural change with respect to the current tax regime, such as the application of a dual system that It completely modifies the form of taxation – both of companies and shareholders – and the increase in income tax, which will impact more than 200,000 high-income taxpayers.
From the Ministry of Finance they project that this first proposal, which will begin its legislative process this week, represents about 70% of the extra US$ 12 billion that this structural change in tax matters seeks to collect under the regime. An idea that the right observes with caution. In the opinion of the president of the Senate Finance Commission, Juan Antonio Coloma (UDI), “it is 50% larger than any previous reform and supposes 20% more taxes than those paid today, which means the largest increase of taxes that there have been”.
Precisely, the opposition parliamentarians were received last week by the head of the Treasury, Mario Marcel, where they learned, in broad strokes, the framework of this entire tax reform package. The head of the fiscal coffers and the undersecretary, Claudia Sanhueza, have been in charge of socializing the proposal, both with the business sector and with former ministers of the portfolio and parliamentary benches of the ruling party, with whom there has been a “permanent coordination” . In addition, both Marcel and Sanhueza have twice attended sessions of the Finance Commission of the Chamber of Deputies, a space that is essential, since it is the first step in the processing of the angular reform of the Government of President Boric.
In this sense, the deputy for Social Convergence (CS) and member of the Finance Commission of the Lower House, Gael Yeomans, projects that in the coming weeks it is appropriate “to know in detail this first stage part by part, giving the discussion in a orderly, seeing the income tax and the modifications that are proposed, in the first place, listening. To do this, the Government has added guests who are going to present on this and thus, also give the legislative discussion in an orderly manner, incorporating visions, but also taking charge of this serious issue and that it needs to be addressed in that way in the debate of the commission”.
Regarding the possible obstacles that the right-wing parliamentary benches could install in the processing of this first law initiative -making its discussion in Congress more extensive-, the deputy and former president of the Liberal Party (PL), Vlado Mirosevic, considers that “it is important that hopefully it achieves the necessary consensus”, where -in his opinion-, in general, “the reform has been well received by the different sectors”.
According to the pro-government parliamentarian, it is a “serious reform, where Minister Marcel gives a guarantee of that, so we hope that the right wing concurs. Now, in case it does not, as has happened in the past, where the The truth is that the right has always been subtracted from the great reforms, so, in that case, we need a simple majority for this to become law. But hopefully there will be a dialogue. The government’s decision is that this be with dialogue, and I hope that the business sectors and the right understand that what we need is a new pact, after the social outbreak, that heals the social fracture that we have in Chile. We hope that they are aware of this and that they concur in a reform.”
For his part, for the president of the Finance Commission of the Chamber of Deputies, Jaime Naranjo (PS), the project that will begin to be discussed in said instance covers the central and fundamental points of the tax reform. A proposal that – in his opinion – is “realistic and flexible” and that in no case would affect investment or stop employment in the country, which are the main apprehensions of the right. However, Naranjo announced that the work of the commission he chairs will be focused on some specific contents of the project, such as exemptions, with the aim of “improving some benefits of exemptions up to the elderly. In addition, we will look for the formula so that those who today one day they are exempt from paying the specific tax, they begin to pay it, as are the mining, aeronautical and maritime companies, and perhaps in this way we can lower the specific tax for the rest of the Chilean population,” details the parliamentarian.
In the ruling party they agree that it is essential to attract majorities, with the aim of achieving a fiscal pact that is stable and that provides certainty over time to taxpayers. In this sense, they consider that it is important that the debate within the Finance Commission be carried out in a “comprehensive manner”, taking into account, however, that not all the parties are represented in said instance, for which it will be It is important that these visions are incorporated, also considering that many economists share the idea that this proposal should be implemented as a “progressive change”, as stated by the former Minister of Finance and current adviser in the Ministry of Housing, Nicolás Eyzaguirre, and as a reform that must be “simmered”, in the words of one of the most emblematic economists of the right and former Minister of Economy, Juan Andrés Fontaine. Both statements, granted to the newspaper Thirdshow the restraint with which they observe the Government’s project.
Finally, after a first phase of socialization of the reform, which has been in the hands of Minister Mario Marcel and his team, in coordination with the General Secretariat of the Presidency (Segpres), in its role as co-processor of the Executive in Congress, In the next stage, the role played by Minister Giorgio Jackson and the portfolio he leads will be essential. In that sense, and in relation to the questions that Jackson has received in his role as political articulator before the Legislature, Deputy Mirosevic believes that the minister could play a good role, because this is the third tax reform in which he participates. , after his experience as a parliamentarian in the process in the Chamber of Deputies and Deputies: in 2014, during the Government of Michelle Bachelet, and in 2018, in the second administration of Sebastián Piñera. After a first stage where the head of the Treasury has had the leading role in the media, in the coming months, in the midst of a process where the Government will have to convene as many agreements as possible, the performance of the Segpres could be fundamental with respect to a reform that seeks, to a great extent, to finance President Boric’s government program.