PRESS RELEASE

Chile's president Piñera announces tax modernization project

By
Wednesday, August 22, 2018

This press release was published in English using an automated translation system

Press Release from Chile's Presidency

Start your 15 day free trial now!

cta-arrow

Already a subscriber? Please, login

President Sebastián Piñera announced on Tuesday the signing of a tax modernization project and 13 measures with which the Government seeks to promote growth, investment and the creation of jobs to boost the country's development.

The President highlighted the growth of 5.3% of the economy in the second quarter and 7.1% in investment, which places Chile as one of the most dynamic countries in Latin America and that "is translating into better jobs, wages and opportunities, which we must strengthen towards the future ".

"The creation of good jobs, the increase of wages and the creation of opportunities for all is and will remain at the heart of our priorities," said the Head of State.

The announced measures consider the following objectives and axes:

- Create a simpler and more unique, more equitable and fully integrated tax system for all Chilean companies, except for a more favorable and special regime for SMEs, which will have lower tax rates. In this way, the taxes paid by the companies will be credit for the taxes that people must pay, which will favor more than 150,000 SMEs and large sectors of the middle class and also make life easier for taxpayers.

- Establish incentives for investment and economic growth through an Accelerated Depreciation System or even instantaneous for all companies and that will be more favorable for the Region of La Araucanía.

- Promote the development of SMEs through a simpler and more understandable tax system, with special incentives for investment and lower tax rates.

- Strengthen and clarify the rules to better combat evasion and avoidance.

- Extend until the year 2035 the tax exemptions for the hiring of labor and investments in Extreme Zones.

- Encourage the acquisition of housing by the middle class, extending from 2000 to 4000 UF the value of the homes that can benefit from this franchise.

- Create the "Taxpayer Advocacy" to avoid arbitrary or abusive acts, granting them greater certainty and greater legal security.

- Encourage the donation of companies to non-profit institutions of basic necessities that today, many times, are destroyed, such as food, diapers, personal hygiene items, books, school supplies, clothing, among others, allowing them to the companies discount these donations as an expense.

- Establish the mandatory use of the Electronic Ballot, as well as the electronic invoice and separate the part of the price corresponding to the product sold from that corresponding to the VAT tax.

- Modernize and simplify the rules of international taxation to attract more investment to the country and to promote the integration of the economy to the world.

- Equating the tax burden between those companies that sell goods and services in a conventional manner and those that do it in digital form.

- Modernize and improve green taxes on polluting activities.

- Ensure tax collection for the State, so that the State can adequately fulfill its important functions, especially in matters of social policies and infrastructure works.

Next, the words of the President in the National Chain:

Dear compatriots:

Our duty is to work, body and soul, to help all Chileans to solve their problems, to take advantage of their opportunities, to mitigate their fears and to fulfill their dreams. To achieve this, during these five months of Government, we have faced, with determination and urgency, issues so important for Chileans, who were so postponed and who required our immediate attention, such as:

Restructuring Carabineros to combat delinquency and drug trafficking more effectively;

Put our house in order in terms of migration;

Advancing towards full equality of rights and dignity between men and women;

Put our children first in line and replace the sad and failed Sename;

Advance in development and peace in La Araucanía.

And we have also worked to promote a climate of greater unity and collaboration among all Chileans, through the search for 5 major National Agreements on matters as important as Citizen Security, Children, Health, Araucania and Integral Development, and laying the foundations to recover our ability to grow, to invest, to create good jobs, to improve wages and create better opportunities for all, and especially for SMEs and entrepreneurs, and of course a new, deserved and better deal for our seniors and our middle class.

With the unity and contribution of all Chileans, we have made very significant progress in all these challenges. For example, we are happy that, despite the serious inherited difficulties and the damaging effects of the US-China trade war on the price of copper and oil, our economy is recovering. Again, it is the most dynamic among the main countries of the Americas, with growth in the second quarter of this year of 5.3% of GDP and 7.1% of investment, which is translating into better jobs, salaries and opportunities, that without a doubt we must strengthen and project towards the future.

Because experience has shown us that there is no better labor policy, fight against poverty and social justice than full employment, and for that we must create many good jobs, and also improve the quality of education for vulnerable sectors and middle class.

Undoubtedly, the creation of good jobs, the increase of salaries and the creation of opportunities for all is and will remain at the heart of our priorities. To that end, we have advanced on such important issues as:

The Universal Nursery

The payment to 30 days to our SMEs

The Labor Statute for young people and seniors

Working from a distance, from home or Telecommuting

The Productivity, Innovation and Entrepreneurship Agenda

The improvement in the quality of education and training

And, in addition, during these five months, we have also worked intensely to prepare the necessary major reforms, beginning, as of this August, a second stage, which means starting to implement important structural reforms such as:

The Reform to Carabineros and the Police of Investigations, and the best coordination between the public prosecutors, the Judicial Power and the police, to give more security and greater peace to you and your family;

The Pension Reform, which will improve the retirement benefits of all pensioners, but in a very special way, those of women, the middle class, the basic pension and the solidary pension contribution;

The Modernization of Health, to reduce waiting lists, lower the price of medicines, have more medical specialists, strengthen primary health and incorporate new technologies to improve the opportunity, quality and dignity with which they access health all Chilean families;

The Education and Training Reform, to allow all our children, young people and workers to receive quality education and training that allows them to be true citizens in the new Knowledge and Information Society;

Labor Modernization to be able to respond to the great challenges of the Technological Revolution, which came to stay, to generate more and better jobs, and to give more freedom to workers and employers so that they can better reconcile the world of work with the world of the family , sports, culture and recreation;

And very important, the Protected Media Class Network.

Chileans and Chileans:

Additionally, today I signed the Bill to Modernize our Tax System.

What are the main principles, objectives and contents of this Tax Modernization?

Create a simpler and more unique, more equitable and fully integrated tax system for all Chilean companies, except for a more favorable and special regime for SMEs, which will have lower tax rates. In this way, the taxes paid by the companies will be credit for the taxes that people must pay, which will favor more than 150,000 SMEs and large sectors of the middle class, and will also make life easier for all our taxpayers;

Establish incentives for investment and economic growth through an Accelerated Depreciation System or even instantaneous for all companies, and which will be more favorable for the Region of La Araucanía;

Promote the development of SMEs through a simpler and more understandable tax system, with special incentives for investment and lower tax rates;

Strengthen and clarify the rules to better combat evasion and avoidance;

Extend until the year 2035 the tax exemptions for hiring labor and investments in our Extreme Zones;

Encourage the acquisition of housing by our middle class, extending from 2000 to 4000 UF the value of the homes that can benefit from this franchise;

Create the "Taxpayer Advocacy" to avoid arbitrary or abusive acts against them, granting them greater certainty and greater legal security;

Encourage the donation of companies to non-profit institutions of essential goods that today are often destroyed, such as food, diapers, personal hygiene items, books, school supplies, clothing and many more, allowing them to companies discount these donations as expenses;

Establish the mandatory use of the Electronic Bill, just as we did with the electronic invoice, and separate the part of the price corresponding to the product sold from that corresponding to the VAT tax;

Modernize and simplify the rules of international taxation to attract more investment to our country and to promote the integration of our economy to the world;

Equating the tax burden between those companies that sell goods and services in a conventional manner and those that do it in digital form;

Modernize and improve green taxes on polluting activities;

And, of course, ensure tax collection for the State, so that the State can adequately fulfill its important functions, especially in matters of social policies and infrastructure works.

I make a sense to all parliamentarians to collaborate, in good faith and with good will, in this urgent and necessary Modernization of our Tax System.

Dear compatriots:

Today we learned about the results of the Casen Survey 2017 that measured the evolution of poverty and the distribution of income between the years 2015 and 2017.

What do these results show?

Basically three things. First, poverty measured by income declined, but the pace of falling poverty is slowing. Second, multidimensional poverty stagnated, mainly due to serious weaknesses in the field of job creation, pensions, social services and citizen security. And third, and very serious, the distribution of income worsened.

Our generation has a mission to fulfill: to transform Chile, during the next decade, into a developed country, without poverty and with greater justice and equal opportunities. A Chile in which all of its children can fully develop the talents that God gave us and can have the security of living their lives with dignity.

It is this noble, demanding and beautiful mission that inspires and guides all the actions of our Government and what motivates us every day to get up very early in the morning and work very hard during the day, to improve the quality of life for all our compatriots, and especially the vulnerable sectors and our middle class.

I am sure that with unity and collaboration we will all be able to fulfill this mission and ensure that all the children of this beautiful homeland can live a fuller life, a happier life, together with their families and their loved ones.

May God bless our country, may God bless all Chileans.

Good evening and thank you very much.