“On June 30 we are going to make the announcement of the entire tax reform and we are going to enter with a couple of projects immediately. One of them is the mining royalty“, he said in his office in the presidential palace of La Moneda.
He added that the reform was a “necessary condition” to deliver the changes that the leftist government of Gabriel Boric, 36, promised when he took office in March, although a separate mining royalty plan based on a bill currently is processing in Congress is also key.
“For us it is a priority, probably number one,” he said.
Boric, who is approaching 100 days in office, garnered strong support in last year’s election, but his popularity has plummeted amid high inflation and social unrest, rising violence in southern Chile over an indigenous conflict, and troubled illegal immigration in the north.
Jackson said the tax reforms would push Chile on par with other mineral-rich nations, providing funds to support research and development in new growth areas for the world’s second-biggest lithium producer.
“There is an opportunity that Chile has with copper, with lithium, to be able to use them to imagine a different productive development system“, he pointed.
He admitted that tax reforms were never an easy sell, especially with inflation at its highest level since the 1990s and economic growth expected to be weak this year despite high world metal prices.
“When you are in good times and everything is going well, here they tell you ‘but are you going to do a tax reform now?’ When you are in a weak moment ‘are you going to do it now?'” he commented. “There is never a good time to do a tax reform.”
Chile is also in the process of reforming its current Constitution, which dates from the dictatorship of Augusto Pinochet. That process, which arose from the social protests at the end of 2019, has been affected by the decline in support for the new document, with the risk that it will not be approved.
Jackson said “unnecessary polemics” throughout the process had disappointed some people, but he said he hopes support will pick up again once the draft is finalized in July. The new text will be submitted to a referendum in September.
Source: Ambito
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