Chile plans to raise copper mining royalties and reform tax system
ANTIAGO - Chile's finance minister, Mario Marcel, on Friday introduced a tax reform bill that increases copper mining royalties on companies that produce more than 50 000 t/y and raises taxes on high-income earners to fund the government's proposed social programs and reforms.
A press release from the treasury department says the plan has two components. One is an ad valorem tax between 1% and 2% for companies that produce between 50 000 t and 200 000 t of fine copper a year and a rate between 1% and 4% for those that produce more than 200 000.
The bill aims to raise 4.1% of GDP over four years, with 0.7% going to a new guaranteed minimum pension fund.
The proposal also raises taxes on high-income earners, capital gains and introduces a new wealth tax for citizens with more than $5-million in assets.
Marcel noted Chile, with a tax collection rate of 20.7% of GDP, is below the OECD median of 34.7%.
"Historically, few countries have reached economic prosperity with a low tax load," Marcel said, adding that 97% of taxpayers won't be affected by the proposal.
The bill also tries to reduce tax exemption and evasion while giving tax breaks for rent and care for children under 2 and the severely dependent.