On Monday, Finance Minister Jorge Quiroz defended the proposal to lower Chile's corporate tax rate, a key component of the José Antonio Kast administration's "National Reconstruction Plan." The initiative aims to gradually reduce the corporate tax rate from 27% to 23% by 2029.
Quiroz rejected criticisms suggesting the cut exclusively benefits the wealthy. According toLa Tercera, the Secretary of State argued that the measure is designed to incentivize investment and job creation within the country.
"This isn't a tax cut for the rich; it's a tax cut for businesses so they have more capital to invest," the minister stated. He emphasized that the project aims to revitalize key sectors, such as construction, to recover the 200,000 jobs lost in the industry.
Dispute over the project's social impact
The Socialist Party (PS) issued a sharp rejection of the proposal in a letter delivered to President Kast by the party's leadership. As reported byCooperativa, the letter, led by Senator Paulina Vodanovic, characterizes the omnibus law as a "disguised tax reform."
The party maintains that the benefits of the measure will be concentrated among big business. "We believe it is essential to state clearly that the initiative you are promoting is not a reconstruction law, but rather a disguised, regressive, and high-risk tax reform, the negative impacts of which will fall upon those with the least in Chile," the PS document states.
The PS also criticized the elimination of property taxes on primary residences. The party warned that this move will reduce essential municipal revenue and weaken the Municipal Common Fund, ultimately impacting public safety services and the maintenance of public spaces.
For his part, Quiroz assured that the reduction will have an immediate impact on small and medium-sized enterprises. The minister detailed that the project includes an employment tax credit equal to 15% of gross wages for companies with low-paying roles.
"Let's not turn this into the typical caricature some people create—that any tax cut is intended to favor the wealthy. No, gentlemen, the economy is in a difficult position; we are going to pull it through, and we are going to do it very quickly," the Finance Minister concluded.
