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Chilean President abandons his fiscal reform and presents new proposal

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

Mexico requests extradition of ‘Mini Lic’ for murder of journalist Javier Valdez

The Mexican government has requested the extradition of Dámaso López Serrano, a former high-ranking member of the Sinaloa Cartel, who is accused of masterminding the 2017 murder of Mexican journalist Javier Valdez, the Attorney General’s Office announced on Tuesday.

López Serrano, known as “Mini Lic,” was arrested last Friday in Virginia, United States, on charges of fentanyl trafficking, a crime he committed while on parole.

“This is the key issue for us, he [López Serrano] is the mastermind of this murder. The rest of the perpetrators are already processed and in jail, he was the one missing,” said Attorney General Alejandro Gertz.

“We immediately made the extradition request,” the official added during the routine morning press conference of President Claudia Sheinbaum.

Valdez, an award-winning reporter specializing in drug trafficking and correspondent for AFP and the newspaper La Jornada, was murdered on May 15, 2017, in front of the office of his magazine Riodoce in Culiacán, the capital of Sinaloa state.

“Mini Lic” was originally arrested in 2017 when he voluntarily turned himself in to U.S. authorities and pleaded guilty to trafficking methamphetamine, heroin, and cocaine. In 2022, he was released on parole.

Gertz confirmed that the Mexican Attorney General’s Office had requested López Serrano’s extradition “countless times,” but Washington had declined to act on the request because he had become a “protected witness” for the U.S. government and “was providing a lot of information.”

“Now, with this situation where they themselves are acknowledging that this individual is still committing crimes, I think there are more than enough reasons for them to support us,” the prosecutor added.

The Sinaloa Cartel is one of the largest drug trafficking organizations in Mexico and was founded by Joaquín “El Chapo” Guzmán, who is serving a life sentence in the United States.

Culiacán has been shaken by a wave of murders since the arrest of Ismael “Mayo” Zambada, another key leader of the cartel alongside Guzmán, on July 25 in New Mexico, United States.

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International

Cuba’s government stresses openness to serious, respectful U.S. relations

Cuba reiterated on Tuesday its willingness to engage in dialogue with the United States, just weeks before Republican President Donald Trump assumes office. During his first term, Trump halted the historic rapprochement between the two countries, which had been initiated just ten years earlier by Democrat Barack Obama.

“It will not be Cuba that proposes or takes the initiative to suspend the existing dialogues, to suspend the existing cooperation. Not even the discreet exchanges on some sensitive issues,” said Cuban Deputy Minister of Foreign Affairs Carlos Fernández de Cossío at a press conference in Havana.

“We will be attentive to the attitude of the new government, but Cuba’s stance will remain the same as it has been for the last 64 years. We are willing to develop a serious, respectful relationship with the United States, one that protects the sovereign interests of both countries,” he added.

His statements come on the occasion of the tenth anniversary of the historic rapprochement announcement between Washington and Havana.

On December 17, 2014, Cuban leader Raúl Castro (2006-2021) and Barack Obama (2008-2016) announced the beginning of a thaw in relations, which led to the restoration of diplomatic ties in 2015, after more than half a century of confrontation.

This process of thawing bilateral relations was later halted by businessman Donald Trump, who significantly reinforced economic sanctions against the communist-ruled country. The Republican will return to the White House on January 20.

Cuba, under a U.S. trade embargo since 1962, was re-listed in 2021 on the “blacklist of countries supporting terrorism,” blocking financial and economic flows to the island of 10 million inhabitants.

Subsequently, the administration of current Democratic President Joe Biden made only slight adjustments to the sanctions and also kept Cuba on this list. However, his administration resumed bilateral contacts with Havana on migration issues and the fight against terrorism.

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International

Mexican government to use church atriums for gun surrender program to combat violence

The atriums of Mexican Catholic churches will be used for the voluntary surrender of weapons in exchange for economic and legal incentives as part of a plan announced on Tuesday by the government to reduce violence.

According to the Mexican government, there is a link between the illegal trafficking of weapons—almost entirely coming from the United States—and the spiral of criminal violence that has plagued the country since late 2006, when a controversial military anti-drug offensive was launched.

“The idea is to set up areas in the church atriums where people can voluntarily surrender their weapons, and in return, they will receive financial resources based on the weapon they are turning in,” explained President Claudia Sheinbaum during her regular press conference.

The left-wing leader emphasized that the program, called “Yes to Disarmament, Yes to Peace,” guarantees that those who surrender their weapons will not face any “investigation.”

“What we want is to disarm. This will be implemented next year. We also did it in Mexico City, and it had significant results,” added the former mayor of the capital, with a population of 9.2 million.

The disarmament plan is part of the government’s “comprehensive security strategy,” one of whose pillars is promoting a culture of peace, especially in regions severely affected by organized crime violence, Sheinbaum pointed out.

More than 450,000 people have been murdered in Mexico since the government launched its military-led anti-drug operation, alongside about 100,000 people who have gone missing.

Despite being a secular state, the Mexican Catholic Church has played a key role in efforts to contain violence, with priests acting as mediators between citizens and criminals. Several clergy members have been killed for this cause.

Just last week, the Catholic hierarchy called on cartels to declare a truce in their violent actions during the celebration of the Virgin of Guadalupe on December 12 and the upcoming Christmas holidays.

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