Kast Celebrates Economic Overhaul on National Broadcast, Faces Three Constitutional Challenges

Original article: Kast celebró la megarreforma en cadena nacional, pero ahora enfrenta tres impugnaciones ante el Tribunal Constitucional

After celebrating the approval and dispatch of the economic tax overhaul during a national broadcast, President José Antonio Kast now faces three challenges introduced by opposition lawmakers against the controversial project.

The Constitutional Tribunal (TC) announced on Thursday that it had accepted and admitted for processing the three constitutional challenges brought by the deputies and senators.

Unanimously, the Plenary of the body resolved to move forward with the actions submitted by the lawmakers questioning provisions from the so-called «national reconstruction» project.

The legal offensive focuses on two main fronts: the tax invariability for up to 20 years for large investments and the controversial system of monetary compensation for projects whose Environmental Qualification Resolutions (RCA) are annulled by the judiciary.

The TC indicated that the filings were consolidated into a single case under Role No. 17.828-26-CPT due to their challenges against different provisions of the same project.

The judicial body’s resolution does not address the substance of the matter, but it advances the three claims made. The review will focus on assessing whether the provisions of the overhaul proposed by the Government align with the Constitution.

The court informed that both the President of the Republic, the Senate, and the Chamber of Deputies will have a period of five consecutive days to express their views on the constitutional issues raised in the challenges if they so wish.

Once this phase is complete, the body will begin the substantive analysis of the challenges.

On Wednesday, August 12, a hearing will be held in which those who wish to be heard in the process can intervene, and the following day another hearing will take place in which the Plenary of the Tribunal will resolve the substantive issues based on the arguments presented by the parties.

After these instances have concluded, the State judicial body will issue a ruling and decide whether to uphold or eliminate the challenged provisions of the bill.

«In accordance with the provisions of Article 67 of Law No. 17.997, Organic Constitutional Law of the Constitutional Tribunal, a five-day period was granted to H.E. the President of the Republic, the Honorable Senate, and the Honorable Chamber of Deputies to express their views on the constitutional issues raised in the requests. Subsequently, the Plenary of the Tribunal will resolve the substantive issues based on the arguments presented during the hearing on Thursday, August 13 of this year,» the TC informed in a press release.

«In addition, it was agreed to call for a public hearing on Wednesday, August 12, 2026, starting at 9:00 a.m. Those who wish to be heard will have until 12:00 p.m. on Monday, August 10, to submit their respective requests in writing, invoking interest in the resolution of the constitutional issues submitted for consideration to this Tribunal,» it was stated.

Tax Invariability

At the center of the controversy is the article establishing tax invariability for investment projects exceeding US$50 million. The rule, defended by the government as a key incentive to attract capital, freezes tax rules for a period ranging from 10 to 20 years, depending on the project’s amount. Opposition lawmakers argue that this mechanism undermines the democratic nature of the Republic enshrined in Article 4 of the Constitution, as it limits the decision-making capacity of Congresses and Governments emerging from future electoral processes. They warn that endorsing this formula would equate to allowing a temporary majority to declare a law unchangeable, effectively blocking future majorities from making modifications.

Fiscal Protection for Companies and Their Environmental Projects

The second major point of the challenge targets the fiscal protection designed for environmental projects. The overhaul states that the Treasury must compensate holders of initiatives when a final ruling annuls their Environmental Qualification Resolution, covering direct and irrecoverable expenses. The opposition labels this proposal unconstitutional, arguing that it turns the illegality of an administrative authorization into the starting point for compensation, without the benefiting company having to demonstrate state service failure, and with an arbitration court that would merely determine the amount of compensation.

For the lawmakers, this rule directly undermines the right to live in an unpolluted environment and the constitutional regime of state liability.

The third action presented by a group of lawmakers combines the objections raised in the two previous challenges, as reported by Pauta.cl.