SANTIAGO, Chile (AP) – Chile’s Congress on Tuesday approved nearly all remaining changes in the country’s sweeping tax and economic reform package. President Jose Antonio Castoresulting in a legislative victory. conservative leader and his efforts to foster growth in one of Latin America’s wealthiest countries.
Tuesday’s vote comes as Mr. Casto, who took office just over three months ago, is struggling to reverse the faltering economy. After months of weak growth, the economy contracted by 0.5% in the first quarter of 2026. The unemployment rate rose to 9.4% in the March-May period, the highest level since June 2021.
The bill aims to revitalize Chile’s private sector, promote job creation and eliminate the budget deficit. It would gradually reduce the corporate tax rate for large companies from 27% to 23%, exempt new homes from state value-added tax, limit the number of new universities that can participate in Chile’s free tuition program, and allow private companies to seek compensation if investment projects are delayed due to environmental disputes.
The Senate approved the bill last week, but amended some provisions and sent it back to the House for a final vote. On Tuesday, lawmakers approved all changes except for changes to how local governments are compensated for tax breaks. The last minor issue must be resolved before the bill becomes law.
Mr Kast welcomed the vote on the government’s flagship economic project.
“I hope all political branches will work together so that the remaining issues are quickly resolved,” he told reporters in the northern city of Copiapo, where he oversaw the government. Responding to severe storms.
Kast, 60, Appointed in March Promising to crack down on crime illegal immigration At the same time, it will reduce public spending and increase private sector revenues. His election defined Chile Sharpest shift to the right from the end of Military dictatorship from 1973 to 1990He vowed to return to the market-oriented economic policies of the time.
“The president’s efforts are essentially focused on deepening and returning to the orthodox neoliberal model of the late 1970s and early 1980s,” said political analyst Gilberto Aranda. “What existed before was neoliberalism, tempered by subsidies and other measures.”
Finance Minister Jorge Quirós said the reforms will increase investor confidence, lower bureaucratic hurdles for investment projects and make Chile’s tax system more competitive.
“We are very satisfied,” Quiros said after the vote.
Opposition politicians have criticized the bill as giving preferential treatment to Chile’s large corporations and the wealthy, and have vowed to challenge it in the Constitutional Court.
“It has become clear that all of José Antonio Casto’s statements about security, jobs and immigration were nothing more than a Trojan horse to promote the project he really cares about: tax cuts for the wealthiest Chileans,” said Constanza Martínez, head of the left-wing coalition Broadfront Coalition.
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