Chile's Senate OKs business-friendly economic reforms / Photo: © AFP
Chile's Senate OKs business-friendly economic reforms
Chile's Senate approved Thursday a business-friendly package of major economic reforms engineered by right-wing President Jose Antonio Kast, which has been assailed by the opposition as favoring rich people.
The changes include a series of tax cuts that include a gradual reduction in levies on companies and a 20-year freeze on the rate for investments that surpass $350 million.
The reforms now need to be approved by the lower chamber of Congress, where right-wing parties that back Kast hold a majority.
Endorsed by US President Donald Trump, Kast came to power in March on a crime-fighting, anti-immigration platform in Chile's most pronounced shift to the right since the dictatorship of Augusto Pinochet from 1973 to 1990.
"Chile needs to grow and this bill makes it possible," Finance Minister Jorge Quiroz said after the chamber approved the reforms in the wee hours of Thursday.
During the debate, opposition Senator Beatriz Sanchez argued that every percentage point drop in the business tax rate will cost the government $420 million in revenue.
Fifty-six percent of Chileans are opposed to these tax cuts, pollster Cadem said.
Kast's approval rating is falling and the government has reduced its forecast for economic growth through 2030 when he will complete his four-year term.
Ariela Jofre, a 21-year-old chef's assistant in Santiago, slammed the reform package.
"It is not really worth it. Maybe there will be more investment but it is just as important for the state to have resources for health care, education and other programs," she said.
Another clause that the opposition slams is this: companies that lose their environmental permits will see their lost investments covered by the government.
The International Monetary Fund has said the Chilean reform package might boost economic growth but to the detriment of government finances.
(W.Novokshonov--DTZ)
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