The Chamber of Deputies approved the Tax Modernization Bill (Exp. 12043) with 84 votes in favor and 60 against, and the text now passes to the Senate. The Senate Finance Committee is expected to begin its review of the bill in early September.

The extensive debate in the Chamber of Deputies was carried out on an article-by-article basis during which the deputies approved the reintegration of the tax system, which was seen as the bill’s core feature. It should be noted that in this matter part of the Christian Democrat bench voted in accordance with the deputies from the official alliance Chile Vamos. The measure includes back-to-back and market-maker limitations, disproportionate withdrawals without economic justification; the special anti-avoidance retained earnings rule; and the benefits of contribution to the elderly and Eleam (retirement homes for senior citizens).

During the debate, the legislators made known a range of diverse and polarized opinions. While the ruling party defended President Sebastián Piñera’s proposal and attacked the tax reform scheme devised by Michelle Bachelet, the opposition, made up of the Left-wing party and the Frente Amplio, refuted the initiative pointing out its regressive and unequal nature. It should be remembered that the government’s main objective with this bill is to promote economic growth, investment, entrepreneurship, savings and job-creation.