The Autonomous Fiscal Council (CFA) has submitted a technical report to the Chamber of Deputies' Finance Committee, warning of nine direct risks to the Chilean economy stemming from José Antonio Kast's major economic reconstruction and reactivation reform.
The organization's president, Paula Benavides, noted that the initiative could lead to a persistent fiscal deficit, projected to peak at 0.71% of GDP in 2030 and 0.43% in 2050. According to CFA data, even if the estimated economic growth—an improvement of up to 0.41% of GDP by 2030—is achieved, the fiscal balance would still remain negative by approximately 0.3% in that year.
The technical report details that the net fiscal impact would be negative between 2026 and 2031, which would force the State to seek additional funding sources not currently included in the proposal. Among the direct risks identified by the council are the costs of corporate tax cuts, the impact of employment tax credits, and the VAT exemption for housing.
Opposition Reactions
Following the CFA's presentation, opposition lawmakers harshly criticized the Treasury's proposal. Emilia Schneider, a deputy for the Broad Front (Frente Amplio), used charts from the presentation to point out that budget adjustments would directly impact Education and Health.
“This is the scale of the cuts being pushed by Kast and Quiroz. Look at Health and Education—budgets that, as the Broad Front, we asked would at the very least not be touched,” Schneider stated, according to La Tercera. The lawmaker urged the Executive branch to be transparent about which services and rights will be affected by the plan.
Meanwhile, Deputy Gael Yeomans warned of the consequences of passing the reform without funding. “If this is approved, it will lead our country into a crisis. That is the price they want us to pay in order to benefit the wealthiest 1%,” the legislator argued. Similarly, independent Deputy Carlos Bianchi described the council's presentation as an action that has “effectively derailed the reform.”
Executive Response and Constitutional Validity
President José Antonio Kast responded to the CFA's observations during a town hall meeting in Puerto Montt. The President assured that his administration respects institutional processes and that Finance Minister Jorge Quiroz will be responsible for addressing the technical concerns.
“We have always maintained the utmost respect for our institutions, just as we have the greatest respect for the Central Bank; every analysis presented is received, reviewed, and analyzed by the Minister of Finance,” Kast declared. The Head of State added that responses to these concerns would be provided progressively starting Wednesday.
Parallel to the fiscal debate, the General Secretariat of the Chamber of Deputies issued a report regarding the tax stability clause contained in the bill. The document, requested by Deputy Jaime Mulet (FRVS), concluded that the proposal to guarantee tax stability for 25 years is admissible and does not violate the constitutional framework.
The Chamber's report maintains that Article 33 of the reform, which grants this guarantee to new investors, falls under the exclusive initiative of the President of the Republic. Although the Chamber's text acknowledges that the 25-year term constitutes an “unprecedented extension,” it determined that this represents a legitimate exercise of presidential legislative power and complies with the principle of tax legality.
