Building on this week's announcement of a phased corporate tax cut from 27% to 23%, Chile's Finance Ministry detailed a reactivation bill under President José Antonio Kast that reintegrates the progressive tax system and allows withdrawals from accumulated Tax Utility Fund (FUT) balances to spur investment. The package targets 200,000 new jobs and 4% growth.
Finance Minister Jorge Quiroz's miscellaneous reactivation bill expands on the previously outlined tax cut—1.5 points in 2027 (Renta 2028), 1.5 in 2028 (Renta 2029), and 1 in 2029 (Renta 2030)—with gradual reintegration allowing partners to credit up to 100% of corporate taxes against their personal Global Complementario by 2029.
A key addition is a transitional FUT withdrawal window with a substitute tax, akin to past mechanisms that raised US$1.7 billion (2015-2017) and US$3.735 billion (2020). Quiroz highlighted benefits for 150,000 companies (half of Chile's workforce), especially SMEs via 15% low-wage tax credits, and construction job recovery.
The bill, part of broader reactivation efforts, includes a new tax invariability statute for investments, 8% capital repatriation for nine months, and DFL-2 benefit expansion. Quiroz advocated calm, gradual implementation and congressional dialogue to deliver an 'expectations shock' for growth by term's end.
