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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

Chuck Schumer Unveils Proposal to Strengthen Oversight of the U.S. Presidency

U.S. Senate Democratic Leader Chuck Schumer on Thursday announced legislation to establish a federal anti-corruption office aimed at strengthening oversight of the executive branch and preventing future presidents from using the White House for personal financial gain.

Schumer said the proposal was prompted by what he described as President Donald Trump’s misuse of the presidencyto benefit his family’s business interests.

“In just 18 months, the Trump family has made more than $4 billion by exploiting the influence of the presidency,” Schumer alleged.

The New York senator also argued that the alleged corruption has had direct economic consequences for American households.

“The same corrupt practices Trump is using to pocket billions of dollars are also forcing Americans to pay, on average, $3,100 more each year because of the rising cost of living,” he said.

The legislation was introduced alongside Democratic Senators Alex Padilla, Jeff Merkley, and Andy Kim.

According to Schumer, the bill has two primary objectives: “First, to return money to the American people. Second, to ensure that no one can ever steal from them again.”

He added that the proposal would create legal mechanisms allowing citizens to seek the recovery of funds allegedly obtained through government corruption.

“The fact that Trump stole money from the American people does not make it his. Americans deserve to get that money back,” Schumer said.

Under the proposed legislation, any U.S. citizen—as well as state attorneys general acting on behalf of their residents—would be authorized to file civil lawsuits to recover funds allegedly acquired through corrupt practices by public officials.

“Our bill would empower any individual, including a state attorney general acting on behalf of the people of that state, to bring legal action to recover money stolen from the public through government corruption,” Schumer said.

The measure is expected to face debate in Congress, where Republicans and Democrats remain deeply divided over executive accountability and the scope of presidential powers.

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International

Trump Administration Urges Latin America to Increase Defense Spending Against Organized Crime

The administration of U.S. President Donald Trump on Wednesday urged Latin American countries to increase investment in defense and security to strengthen the fight against organized crime and drug trafficking networks.

The appeal was made by Elbridge Colby, the U.S. Under Secretary of Defense for Policy, in an article published by Americas Quarterly. Colby argued that governments across the region should assume greater responsibility for protecting their territories from transnational criminal organizations.

“It is essential that our neighbors in the region invest more in their own defense and security. There is no reason why any country, especially those facing significant narco-terrorist threats, should spend so little on defense,” Colby wrote.

The Pentagon official described it as “absurd” that some Latin American nations allocate less than 1% of their Gross Domestic Product (GDP) to defense, although he did not identify the countries. He contrasted that with NATO members in Europe, many of which are increasing defense expenditures to 3.5% of GDP, with an additional 1.5% devoted to security-related investments.

Colby, who participated earlier this month in the Conference of Defense Ministers of the Americas in Cusco, Peru, said there is “a historic opportunity” for the United States and its regional partners to strengthen cooperation against drug trafficking and other transnational threats.

He also defended the proposed Shield of the Americas, a military partnership promoted by the Trump administration to combat organized crime and supported by several conservative governments in the region. The initiative does not include Brazil or Mexico.

In addition, Colby said the administration’s security strategy includes an updated interpretation of the Monroe Doctrine, the long-standing U.S. foreign policy principle that historically viewed Latin America as part of Washington’s sphere of influence.

“Of course, we recognize that the Monroe Doctrine is controversial in many circles. But it is also frequently misunderstood,” he said.

According to Colby, the United States is not seeking “exploitation, subordination or dependence,” but rather a region characterized by greater prosperity, stability and security.

He also stated that Washington is prepared to use “all available resources,” including the U.S. Armed Forces, to combat drug trafficking and irregular migration. Colby highlighted ongoing counternarcotics operations in the Caribbean, despite criticism from human rights organizations that have questioned some missions over allegations of extrajudicial killings in international waters.

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International

FAO and WFP Seek $42 Million to Prepare Southern Africa for Unprecedented El Niño

WHO warns of El Niño impacts in Latin America

The Food and Agriculture Organization of the United Nations (FAO) and the World Food Programme (WFP) on Thursday appealed for $42 million to help vulnerable communities in southern Africa prepare for what is expected to be an unprecedented El Niño event.

The funding will enable humanitarian agencies to protect millions of people before worsening weather conditions severely affect agricultural production across the region.

Following a meeting with partners in Maputo, Mozambique, the two UN agencies said they still need to secure $42 million of the $54 million required to assist 2.3 million people in Madagascar, Malawi, Mozambique and Zimbabwe.

In a joint statement, FAO and WFP said the appeal marks the first time the two organizations have launched a large-scale, forward-looking call for anticipatory action, warning that insufficient funding could push the region’s most vulnerable families into a major food security crisis.

“The period before the main planting season is critical for taking action,” said José Luis Fernández, FAO Representative in Mozambique. He stressed that early intervention is both more effective and less costly than responding after crops have failed and productive assets have already been lost.

“With timely and flexible financing, we can help farmers access appropriate seeds and agricultural inputs, protect livestock and water resources, and sustain food production before reduced rainfall causes irreversible damage,” Fernández said.

Claire Conan, WFP Representative in Mozambique, emphasized that acting before disasters strike is more efficient and cost-effective than responding after communities have lost their livelihoods. She added that the agency is working closely with the Mozambican government to translate climate forecasts into preventive measures aimed at reducing the impact of droughts and floods.

The planned interventions include supporting farmers, strengthening food production systems and protecting the food security of the region’s most vulnerable households, with the goal of reducing the risk of widespread hunger.

El Niño is a recurring climate phenomenon characterized by unusually warm sea surface temperatures in the equatorial Pacific Ocean and changes in atmospheric circulation, disrupting weather patterns around the world. Its most recent episode, between 2023 and 2024, was associated with record global temperatures, severe droughts across southern Africa, Central America and northern South America, as well as destructive wildfires, torrential rainfall and widespread flooding.

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