On Wednesday, the administration of José Antonio Kast introduced a multi-purpose bill featuring a structural tax reform aimed at cutting red tape and boosting domestic investment.
The initiative proposes a gradual reduction of the corporate income tax (first-category tax) from 27% to 23%. According to reports fromLa Tercera, the plan involves a 1.5 percentage point cut in the first year, another 1.5 in the second, and a final 1 percentage point drop in the third, with the process set to begin in 2028.
The bill also seeks to reintegrate the tax system, moving from a 65% semi-integrated regime toward full 100% integration through a three-year phased approach. This measure would be fully implemented by 2030, the same year the current presidential term concludes.
Economic stimulus measures include a 0% VAT on new homes for a 12-month period, with no price cap. Additionally, the plan proposes eliminating property taxes for residents over 65 on their primary residence, regardless of their financial situation.
In an op-ed forLa Tercera, economist Francisco Castañeda warned that fiscal discussions must be approached with caution given rising fuel prices and international uncertainty. Castañante noted that while reducing the corporate tax carries a fiscal cost, lower revenue from the use of Mepco could help alleviate the deficit.
Diplomatic Tensions and Visa Crisis
Alongside the economic agenda, Chile's foreign policy is facing harsh criticism over interventions in foreign elections. Former Ambassador to the United States, Juan Gabriel Valdés, questioned President Kast's support for Hungarian leader Viktor Orbán during the recent elections in Hungary.
Valdés stated that the message of support was broadcast using national symbols, noting that “it was recorded at La Moneda with Chilean flags in the background and was broadcast on Hungarian television in Hungarian.” The former diplomat described the gesture as a “profound disregard for the international system and international traditions.”
The former ambassador also warned of the risks of interference, asking: “What happens if tomorrow a Chilean president or official tries to interfere in a Peruvian or Bolivian election?”
The diplomatic crisis extends to relations with Washington following the revocation of visas for Chilean officials. Valdés linked this development to the controversy surrounding the so-called “Chinese cable,” calling the move “a lack of respect” and an “unfriendly gesture.”
While acknowledging the United States' sovereignty to decide who enters its territory, the former diplomat criticized the manner in which the warning was issued. “The United States has every right to admit whoever it wants to its country, but when it tells a friendly nation—under circumstances where explanations were provided—that if a certain thing is approved, visas will be revoked, I believe that is not a friendly gesture, and we should all have viewed it that way,” he maintained.
Valdés compared the current situation to his previous experience, recalling that there were no similar reprisals during his tenure on the UN Security Council. “I voted against the war in Iraq on the UN Security Council, and it never crossed my mind that President Bush would think to revoke my visa,” he noted.