SANTIAGO: Chile will raise its tax take by around $700 million through a wide-reaching tax reform to be unveiled in April, finance minister Felipe Larrain said in an interview published Sunday.
The reform will tighten tax rules for foreign companies, raise levies on larger firms and will reduce income tax for individuals across the board and for smaller and mid-sized companies.
The government will tax large companies at a rate of 20 percent, effectively making permanent a temporary increase implemented in the wake of a massive earthquake in early 2010 that has already been partially rolled back and which was due to revert to an original 17 percent next year.
"There will be a very moderate increase in the tax burden ... considering tax increases and reductions," Larrain said, adding the increase in tax revenue would be towards the lower end of an expected $700 million to $1 billion range.
"As President (Sebastian Pinera) already said, the tax on (large) companies will remain at 20 percent. But we will also reduce taxes on individuals. There will also be a significant reduction in stamp duty."
Pinera said last week the tax reform was aimed, in part, at raising the tax take to help fund education reforms the unpopular government pledged in the face of protests last year to demand more social benefits and spending.
Pinera had previously said large companies have to make a greater contribution to a more equitable tax system that will seek to foster the growth of smaller and medium-sized companies.
Pinera hiked royalties on mining companies in 2010 and raised a host of taxes to help finance reconstruction after the earthquake.
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