Senator Ibáñez Critiques Government’s Reckless Reform on Environmental Costs for Big Corporations

Original article: «La megarreforma de la irresponsabilidad»: Senador Ibáñez criticó norma que restituye gastos a grandes empresas por anulación de RCA

Following a recent Senate Finance Committee meeting on the «national reconstruction» bill, attended by Finance Minister Jorge Quiroz, Senator Diego Ibáñez (FA) raised concerns about the government’s lack of fiscal calculation regarding the proposed reimbursements for companies whose Environmental Qualification Resolutions (RCA) are annulled.

«Kast’s government, through Dipres, admits it cannot estimate how much the state will spend reimbursing large companies when a court nullifies their Environmental Qualification Resolution, as suggested by its tax reform. Can you imagine all of Chile covering the costs for Hidroaysen or Pascualama?» questioned the parliamentarian from the Valparaíso region.

Describing it as «the megarreforma of irresponsibility,» Senator Ibáñez also highlighted the fiscal policy decree, emphasizing the importance of understanding the long-term impact of this reform on budget deficits.

«We are open to dialogue, but it must be clear and serious as it requires cross-party support through a technical working group. We cannot say that dialogue will only occur if the idea of legislating is approved,» the leftist legislator declared.

The Commission will continue its analysis of this initiative on Monday, June 8, from 10 AM to 6 PM, during which it will begin the round of hearings with the participation of the president of the Autonomous Fiscal Council, Paula Benavides.

On Tuesday and Wednesday of that week, it is expected to continue the hearings, as reported by the Senate bulletin.

If the idea of legislating is approved, the detailed analysis will be carried out by the members of the Finance; Labor and Social Security; and Environment, Climate Change and National Goods committees.

Other Opinions on the Project

During the session, Senator Daniella Cicardini (PS) pointed out that «this reform is structural. There is a government full of inconsistencies because it decrees a social cut, introduces a project that reduces investment, and now wants to issue debt. I want to ask if they will present the fiscal target to know what projections we are going to process this on.”

Meanwhile, Senator Daniel Núñez (PC) commented that «the diagnostic does not address the value-added aggregation of the export basket and the diversification of exports. This should be on the radar of the Ministry of Finance, and I want to know if they are doing anything about it. There is an economic complexity index that points to this diversification.»

Senator Paulina Vodanovic (PS), expressed a series of doubts stating that «this project is called reconstruction, and we hear nothing about reconstruction; it is not designed to finance it. There are so many issues to address calmly, we should at least separate the reconstruction from this, and I do not say this to delay it. We demand to treat the project seriously.»

Meanwhile, Senator Fabiola Campillai asked Minister Quiroz about the presentation of the project that raises borrowing by 6.2 billion dollars: «I understand that this megarreforma collects less; how do they intend to pay for that? What tax returns will the reform provide to us?» commented the legislator.

Important Information

The framework of the megarreforma pushed by Kast’s government includes economic, tax, labor, environmental, and housing construction regulations for victims of forest fires.

In general terms, the Chamber of Deputies dispatched the following matters:

• A gradual reduction from 27% to 23% of the First Category Tax for companies, except for SMEs that maintain a different system. This reduction will be applied gradually for large firms over a three-year period (projecting 25.5% in 2027 and 24% in 2028).
• The reintegration of the income tax system and the invariability of taxation for 25 years for local or foreign investors. It was approved to ensure a maximum tax burden on income tax for a quarter of a century for national and foreign investors developing projects over US$ 50 million.
• An increase of 400 million to the Emergency Fund for Fires for Valparaíso, expanding to the regions of Ñuble and Biobío.
• A tax credit for employment. Inclusion of direct economic incentives to encourage formal hiring and reactivate lagging job positions.
• The temporary exemption from the payment of VAT for the purchase of new homes.
• Ending property tax payments for primary residences for individuals over 65 years old.
• Access to universal childcare through a modification in the Labor Code.

Watch the complete session of the Senate Finance Committee below:

We will continue to keep you informed.