Two La Tercera columnists present opposing views on cutting Chile's corporate tax amid economic slowdown and fiscal deficit. Alejandro Weber advocates reducing it from 27% to 23% to boost investment and jobs, offset by spending cuts. Carlos J. García warns it won't drive significant growth due to rent-seeking and market concentration.
Chile's economy showed marked slowdown in 2025: 3.3% growth in the first half and just 1.7% in the second, confirmed by January 2026 Imacec contraction, writes Alejandro Weber, dean of Economics at Universidad San Sebastián. The Public Finances Report shows 2026 spending commitments at 23.8% of GDP, revenues at 22%, structural deficit of at least 2.7% and cash deficit of 1.8%. March fiscal obligations total about US$7,500 million, leaving coffers nearly empty. Chile is the only OECD country to raise corporate tax burden over the past 20 years, while 34 of 38 cut it, notes Weber, proposing a drop in first-category rate from 27% to 23%, netting a fiscal cost of 0.36% of GDP (0.09 points per percentage point, per Comisión Marfan). He suggests gradualism, permanent spending cuts—the government announced US$4,000 million for the first year—and other revenues like online betting regulation (0.1% GDP). 'Lower corporate tax means more investment, more formal jobs, and higher market incomes for workers,' writes Weber. In contrast, Carlos J. García, academic at Universidad Alberto Hurtado, questions benefits. He cites Mertens and Ravn estimating 0.6% per capita GDP boost per point cut, but Owen Zidar shows growth comes from cuts to lower incomes, not corporations, where surplus goes to dividends in concentrated markets. VAT cuts have incomplete pass-through to consumers. García calls for public investments in mining, desalination, infrastructure, and human capital. 'These rosy accounts crumble when they hit the reality of rent-seeking and inequality,' he states.
