International

Chilean President abandons his fiscal reform and presents new proposal

Photo: MSM

August 2|

Chilean President Gabriel Boric said on Tuesday that his government will not insist on a rejected tax reform bill and will promote new initiatives to raise the necessary funds to address some of its promised social proposals.

In June, the leftist ruler had said that his government would insist at the end of July in the Senate to resume the legislative processing of the tax adjustment.

Through a new Fiscal Pact, Boric said that the spending proposals involve resources for 8,000 million dollars to finance programs such as the Universal Guaranteed Pension to improve the lowest pensions, reduction of waiting lists in health, as well as greater investment in citizen security.

“This proposal considers the contribution made by growth, the reform of the state, the strengthening of tax oversight and taxes paid by the higher income sectors to be able to finance in this way the social expenses that are urgent,” he said in a televised speech.

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“We are not going to insist in the Senate with the bill that was previously rejected”, he added.

Boric did not specify deadlines for the delivery and processing of the initiatives, or how much the total collection is expected to be.

The government’s new proposal will be divided into two projects, one to improve tax compliance and the other to adjust income tax focused on those with greater resources.

“This initiative will also include tax incentives for investment, productivity and formalization, as well as benefits for the middle class and a new regime for smaller companies,” he said.

He specified that the tax incentives would be equivalent to 0.5 points of the Gross Domestic Product (GDP).

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The first project includes measures that seek to increase tax collection through legal modifications that do not imply a tax increase, which would increase tax collection by 1.5% of the GDP in net terms, according to a government minute.

Meanwhile, the second will be focused on income tax for both companies and individuals and will include incentives for investment, productivity and formalization, as well as benefits for the middle class and the new tax regime for smaller companies, which would have a fiscal cost of 0.5% of GDP.

At the investment level, tax incentives such as semi-instantaneous depreciation and a tax credit fund for investments with a multiplier effect on activity, employment and environmental sustainability are proposed.

It also commits to reduce by 30% the processing time for mining projects, according to the minutes.

Additionally, the plan includes five priority areas of productive diversification that by 2026 foresees three or four new lithium projects, two thirds of the energy matrix with renewable sources, 10-12 projects in the development of green hydrogen and an increase in the digital economy.

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The original tax reform bill was rejected in March by the deputies and the government could only insist on its passage through the Senate.

International

Paraguay summons Brazilian ambassador over Itaipú espionage scandal

Paraguay summoned the Brazilian ambassador in Asunción on Tuesday to demand “explanations” and called its own representative in Brasília for consultations following Brazil’s acknowledgment of an espionage operation. The Brazilian government, led by President Luiz Inácio Lula da Silva, attributed the operation to the previous administration.

The surveillance effort aimed to uncover Paraguay’s position in now-suspended negotiations with Brazil regarding the pricing of electricity from the binational Itaipú hydroelectric plant, according to reports in the Brazilian press.

The Brazilian government “categorically denied any involvement in the intelligence operation,” stating in a Foreign Ministry communiqué on Monday that the espionage was carried out under former President Jair Bolsonaro’s administration (2019-2023).

“The operation was authorized by the previous government in June 2022 and was annulled by the interim director of the (state intelligence agency) ABIN on March 27, 2023, as soon as the current administration became aware of it,” Brazil’s government asserted.

Paraguay’s Foreign Minister Rubén Ramírez announced that Brazilian Ambassador José Antonio Marcondes de Carvalho was summoned “to provide detailed explanations” regarding the operation. Additionally, Paraguay recalled its diplomatic representative in Brasília “to report on aspects related to the intelligence activity conducted by Brazil regarding Paraguay’s government affairs.”

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International

Elon Musk to step down as government advisor, per Trump insiders

President Donald Trump has informed his inner circle that Elon Musk will be stepping down from his role as a government advisor, according to a report by Politico today.

Citing three individuals close to Trump, Politico states that the president is pleased with Musk’s leadership at the Department of Government Efficiency (DOGE), where he has implemented significant budget cuts. However, both have agreed that it is time for Musk to return to his businesses and support Trump from a different position outside the government.

A senior administration official told Politico that Musk will likely maintain an informal advisory role and continue to be an occasional visitor to the White House. Another source warned that anyone thinking Musk will completely disappear from Trump’s circle is “deluding themselves.”

According to the sources, this transition is expected to coincide with the end of Musk’s tenure as a “special government employee,” a temporary status that exempts him from certain ethics and conflict-of-interest regulations. This 130-day period is set to expire in late May or early June.

International

Milei vows to make Argentina so strong that Falkland Islanders “choose” to join

Argentine President Javier Milei reaffirmed his country’s claim over the Falkland Islands (known as the Islas Malvinas in Argentina) and praised the role of the nation’s armed forces during a ceremony marking the “Veterans and Fallen Soldiers of the Malvinas War Day,” commemorating 43 years since the 1982 conflict with the United Kingdom.

Argentina continues to assert sovereignty over the islands, arguing that Britain unlawfully seized them in 1833.

“If sovereignty over the Malvinas is the issue, we have always made it clear that the most important vote is the one cast with one’s feet. We hope that one day, the Malvinas residents will choose to vote with their feet and join us,” Milei stated.

“That is why we aim to become a global power—so much so that they would prefer to be Argentine, making deterrence or persuasion unnecessary. This is why we have embarked on a path of liberation, working to make Argentina the freest country in the world and once again the nation with the highest GDP per capita on the planet,” he added.