The administration of President José Antonio Kast presented a bill titled "National Reconstruction" to Congress this Wednesday. The initiative aims to expand and extend the coverage of the Temporary Emergency Fund for Wildfires (FET), which was originally established to address the Valparaíso fires in February 2024.
According to the legislative text, the proposal increases FET funding by $400 billion, which would raise the total authorized amount to $1.2 trillion. The measure is intended to direct fund resources to the Ñuble and Biobío regions as well.
This expansion is a response to the emergency caused by the wildfires on January 17 and 18, 2026. These blazes affected the municipalities of Concepción, Penco, Tomé, Florida, and Los Ángeles.
The toll from the southern wildfires includes 42,288 hectares burned and approximately 4,100 homes destroyed or damaged. The human impact includes 21 fatalities and 333 injuries, according to the details provided in the bill.
The bill establishes that the fund's coverage will be extended until December 31, 2028. The legal text specifically states: “The coverage of the Temporary Emergency Fund for Wildfires (FET), created by Law No. 21,681, is expanded and extended, increasing its financing by $400 billion, to reach a total authorized amount of $1.2 trillion (...)”.
To fund this budgetary increase, the initiative seeks to boost revenue through tax mechanisms. The project aims to achieve this resource increase through new fiscal revenue measures.
To cover this increase, the bill establishes temporary collection mechanisms. Notable among these is a voluntary system for declaring foreign assets or income, subject to a flat 10% tax, with a differentiated rate of 7% designed to incentivize the repatriation of capital and investment in Chile.
The bill also proposes that companies with accumulated balances in registries such as the Reinvested Profits Fund (FUR) or the Taxable Profits Fund (FUT) may opt for a flat 10% tax on those amounts. The document notes that this regime seeks to mobilize resources held back for tax reasons to reintegrate them into the economy.
Additionally, the law provides for a temporary 50% reduction in the tax on donations when they are made through public deeds within a one-year period. The legal text also seeks to exempt these procedures from the requirement of the so-called judicial insinuation.
