Chile Senate passes contested megareform reducing corporate tax

The Chilean Senate gave a narrow 26‑24 approval to the "Law for National Reconstruction and Economic Development" after a marathon session in the early hours of Thursday. The measure, backed by President José Antonio Kast’s government and Finance Minister Jorge Quiroz, is presented as a stimulus package.

Key provisions include a gradual reduction of the corporate income tax from 27% to 23% by the end of 2029, a 20‑year tax‑invariability regime for large‑scale investments, an exemption from property tax for residents over 65, and a new credit line of US$6.2 billion slated for 2026. To offset expected revenue shortfalls, the state budget was trimmed by three percentage points, affecting education and primary health services.

Left‑wing parties, trade unions and critics argue the reform will cut state revenue by roughly US$3 billion a year and undermine social programs. They have signaled plans to file a constitutional challenge, while the International Monetary Fund has warned of potential fiscal risks.