Chile to Propose Tax Reform
April 20, 2012 Taxation in Chile
SANTIAGO – Chile will soon present a proposals for tax reform in order to boost national prosperity and fund further investment into the national education system.
Earlier this week the president of Chile Sebastián Piñera announced that the government will soon put forward a proposal to reform the tax system with the aim to “to provide permanent, responsible financing for the broad educational reform we are implementing and to which we are completely committed”, which, amongst other changes, will overhaul regulations for personal and business taxation, and could lower fuel taxes. The proposal is still not finalized, and is expected to be presented to Parliament by the end of April.
Tax experts in Chile are saying that the government has indicated that it intends to lower the number of tax brackets applied to calculation personal income taxes, with taxpayers earning the average national income set to see the most significant decrease in their tax obligations. If implemented, the change is expected to benefit up to 1.5 million taxpayers in Chile.
The President also said that the government plans to compensate any reductions in revenues from personal income taxes with a small increase to the rate of taxes applied on businesses. He added that the government will aim to balance the rates of personal income taxes and corporate income taxes to encourage greater economic growth and raise more funds in order to invest into the national education system.
Later this week, on April 17th, a spokesperson for the government Andrés Chadwick also acknowledged that the high price of fuel is a major issue in Chile, and said that the government is looking at addressing the situation as part of the tax reforms.
Photo by jasonpearce