Chilean Constitutional Court partially blocks tax reform

Chile's Constitutional Court has issued a ruling on the National Reconstruction and Social Economic Recovery project, partially upholding challenges brought by the opposition. The court declared certain articles unconstitutional, specifically those regarding indemnifications for projects whose environmental qualification resolutions (RCA) are annulled by judicial sentences. The court also placed limitations on aspects of the tax invariability regime intended for large national and foreign investments.

Despite these setbacks, the core economic pillars of the reform remain intact. The initiative seeks to reduce corporate tax from 27% to 23%, include VAT exemptions for home purchases, and provide fiscal benefits for capital repatriation. Supporters, including members of the Republican Party, stated that the ruling does not dismantle the economic axis of the project, which aims to foster investment and job creation. The government views the reform as a vital tool to increase economic growth and reduce unemployment.