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Chile: Chamber of Deputies Approves Tax Increase on Large Businesses

By: PanAm Post Staff - May 15, 2014, 12:18 pm

EspañolOn Wednesday, the Chilean Chamber of Deputies passed a tax reform bill that the government claims will help address the issue of inequality in the country. Among the major changes included in the new policy are tax increases for large corporations and the elimination of tax exemptions for businesses when reinvesting profits.

Following extensive debate, deputies overwhelmingly voted in favor of the reform package expected to bring in approximately US$8.2 billion, the equivalent of three GDP percentage points. The money will finance programs in education and health care.

In addition to education improvements and strengthening government finances, the Michelle Bachelet administration seeks more equitable economic growth in Chile to help with inequality. Chile currently experiences one of the highest rates of disproportionate wealth distribution in all of Latin America.

The tax reform bill now moves the Senate and will seek to increase taxes on big companies from 20 to 25 percent. Combined with the elimination of tax exemptions for the reinvestment of profits, the wealthiest top 10 percent in Chile will see their overall tax burden increase from 10.2 to 23.8 percent.

Source: Reuters.