The Finance Committee of the Chamber of Deputies approved what could perfectly be considered the heart of the reconstruction bill and national reactivation: the reduction of the First Category tax for large companies from 27% to 23%. The miscellaneous project is discussed until fully dispatched in that committee.
The component of the corporate tax reduction, housed in article 10 of the project, was approved with nine votes in favor, all from the ruling party and Juan Marcelo Valenzuela from the PDG, 3 against, from the opposition, and one abstention from Priscilla Castillo, from the DC. Of course, the transitional articles had not yet been analyzed at the close of this edition and that contemplate the reduction schedule, starting at 25.5% in 2027, 24% a year later and 23% for 2029.
Additionally, the commission approved, by the same vote, the changes in the PPM of small and medium-sized companies, reducing it from 0.25% to 0.23%; and article 11 that integrates the income tax system between corporate taxes and that of its partners.
Finally, the legislators gave the green light to another relevant article within the same articles: the elimination of the capital gains tax on liquid stock market operations, the so-called article 107 of the Income Tax Law. This tax today amounts to 10%.
The approval of the aforementioned article was not without controversy, since opposition deputies complained to the president of the Finance Commission, Agustín Romero, Republican, for the closure of the debate, but the legislator responded that the discussion had already been extended and told them that 1,603 indications were entered into the project this Wednesday.
Tax credit for retention and formalization of workers
Earlier, A first sign of flexibility was delivered this Wednesday night by the Minister of Finance, Jorge Quiroz, within the framework of the processing of the reconstruction and reactivation law.
This is the tax credit for the retention and formalization of workers, one of the measures most defended by Quiroz, but with a higher fiscal cost of US$1.4 billion per year and with more criticism from labor specialists since it does not ensure new hiring and implies a significant renunciation of resources on the part of the Treasury.
The benefit focuses on monthly remunerations between 7.8 and 12 UTM, $550,000 (US$618) to $838,000 (US$942), with a structure that will be a credit equivalent to 15% for remunerations from 7.8 UTM, decreasing progressively for the highest incomes up to 12 UTM.
The amount of this credit may be attributable to the First Category taxto VAT and to the Provisional Monthly Payments, PPM, of the companies.
Although the credit rate was even at 15% in the original projectthis Wednesday the Executive opened up to making it more flexible.
So, Quiroz proposed a new formula to focus credit on young workers and womenafter requests from parliamentarians from the ruling party, such as RN Diego Schalper, and from the opposition such as the independent from the PPD bench, Carlos Bianchi.
Specifically, The credit would start at 14% of the equal remuneration, but if the beneficiary is a female workeris increased to 15%. If you are a man, it is reduced to 13%.
While if the beneficiary is a young person under 25 years of age, 1.5 percentage points are added to the credit.
In this way, In the maximum case of a woman under 25 years of age, the credit rate will be 16.5% of the remuneration, while the minimum case, a man over 25 years of age, the rate will be 13%. A man under 25 years of age would have a rate of 14.5%.
As Quiroz explained in the commission, the financial impact is similar to that originally calculated by the Executive. “It is marginally lower than initially calculated. Credit is not being redesigned”said the Secretary of State.
According to the financial report, prepared by the Budget Directorate, Dipres, the implementation of these indications will imply a marginal improvement in the fiscal balance, that is, at a lower cost. of $39,068 million (US$43,928) during the first year, and of $48,386 million (US$544,061) in the tenth year of validity, with respect to what was reported in the original report.
Since this article 9 was already approved by the commission this Tuesday night, The legislators discussed whether to reopen the vote to enter the amendments proposed by the government.
Thus, finally the commission approved the new article by 10 votes in favor, including Bianchi and Deputy Castillo, 2 against and one abstention, from Valenzuela of the PDG, who requested that credit be extended mainly to SMEs and reduced for large companies.
