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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

Salvadoran National Arrested in New Jersey with Over 70 Machine Gun Conversion Devices

The U.S. Department of Justice announced the arrest of 21-year-old Salvadoran national Erick Márquez Cruz after authorities allegedly discovered more than 70 machine gun conversion devices and other firearm-related components during a search of his residence in North Bergen, New Jersey.

According to the Justice Department, law enforcement officers executed a search warrant on June 25 at Cruz’s home, where they recovered a 3D printer that was allegedly being used to manufacture firearm components. Investigators also seized 17 3D-printed firearm frames, magazines, and more than 70 machine gun conversion devices (MCDs).

Federal authorities explained that the conversion devices, which are classified as machine guns under U.S. law, are designed to convert semiautomatic firearms into fully automatic weapons capable of firing multiple rounds with a single pull of the trigger.

Cruz has been charged with unlawful possession of a machine gun. If convicted, he faces a maximum sentence of 10 years in federal prison and a fine of up to $250,000, or twice the gross financial gain resulting from the offense, whichever is greater.

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International

Venezuela Earthquakes Spark Diplomatic Thaw With Former Critics

The devastating earthquakes that struck Venezuela have triggered an unprecedented diplomatic thaw between Caracas and several governments that had maintained strained relations with the country, raising hopes that the humanitarian response could pave the way for broader international engagement under the administration of U.S. President Donald Trump.

The United States, Chile, Argentina, El Salvador and Israel were among the first countries to announce humanitarian assistance, deploy search-and-rescue teams or establish direct contact with acting President Delcy Rodríguez to coordinate relief efforts in the hardest-hit areas.

Canada also joined the international response by announcing humanitarian aid while opening a domestic debate over the importance of maintaining diplomatic representation in countries such as Venezuela to better respond to emergencies and assist its citizens abroad.

The wave of international cooperation marks a sharp contrast to the diplomatic tensions that followed Venezuela’s disputed presidential election on July 28, 2024, in which Nicolás Maduro was declared the winner.

In the aftermath of that vote, the governments of Argentina, Chile, Costa Rica, Panama, Peru, the Dominican Republic and Uruguay publicly questioned the official election results, triggering one of the region’s most significant diplomatic crises in recent years.

The Venezuelan government responded by withdrawing its diplomatic personnel from several of those countries and demanding the departure of their representatives, further deepening the country’s international isolation.

The humanitarian emergency created by the twin earthquakes has now prompted renewed communication between Caracas and governments that had previously suspended or significantly reduced diplomatic engagement, underscoring how major natural disasters can temporarily reshape international relations despite longstanding political disagreements.

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International

Venezuela Earthquake Death Toll Surpasses 1,700 as Search for Survivors Continues

Venezuelan authorities have raised the death toll from last week’s twin earthquakes to more than 1,700, as rescue teams continue searching for survivors in the country’s hardest-hit coastal region.

According to the latest official report released on Sunday, the powerful earthquakes, measuring magnitudes 7.2 and 7.5, have claimed at least 1,719 lives. National Assembly President Jorge Rodríguez also reported that 5,034 people were injured, while 15,866 have been displaced and another 22,619 are receiving medical care.

The United Nations has expressed growing concern over the scale of the disaster, estimating that as many as 68,000 people could still be missing.

La Guaira bears the brunt of the disaster

The coastal state of La Guaira has suffered the greatest loss of life and the most extensive damage. The Venezuelan government has declared the area a disaster zone and placed it under military control as emergency operations continue.

Five days after the earthquakes struck, search-and-rescue teams remain on the ground, supported by additional heavy equipment and international rescue crews. However, hopes of finding more survivors beneath the rubble continue to diminish with each passing day.

One of the most dramatic rescue operations unfolded Monday in Catia La Mar, where emergency teams from El Salvador, Mexico, and Venezuela worked together to reach a 21-year-old man who has remained trapped inside a collapsed building since the earthquakes struck.

The twin earthquakes hit Venezuela on June 24, with the epicenter located between San Felipe and Yumare in the country’s northern region. The first quake, measuring magnitude 7.2, struck at 6:04 p.m. local time. Just 39 seconds later, a second and stronger magnitude 7.5 earthquake occurred farther to the southeast. Combined, the seismic activity lasted nearly three minutes, causing widespread devastation across several regions of the country.

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