On January 2, the Senate Finance Committee began its discussion of the Tax Reform Bill on an article-by-article basis, inviting several experts to share their views on the initiative. Senators are expected to begin to vote on the bill next Monday in order to send it to the Senate floor before January 14.
Click here to access the financial report prepared by the Ministry of Finance, containing the latest amendments introduced by the Executive branch.
The keynote presentation was given by former Director of the Internal Revenue Service (SII, for its acronym in Spanish) Michel Jorratt, who raised doubts regarding the uptake of VAT levied on digital services. He compared tax revenues raised by other countries in the region, such as Argentina and Uruguay and concluded that the Chilean government will not be able to collect more than USD 100 million per year, as already estimated by the Executive branch.
He argued that the difference in tax revenues compared with other countries may be partly explained by the direct import of cheaper goods by end consumers which is dealt with in Chile. Jorratt clarified that the objective of taxing these cross-border activities is to avoid an increase in revenue losses, rather than to directly increase revenue.
Other presentations included one by Association of Internal Revenue Service Auditors (AFIICH) president Juan Apablaza and National Association of Internal Revenue Service Officials of Chile (ANEIICH) president Marcos González. These associations submitted a joint document containing proposals for “A New Social Pact with Fiscal and Tax Justice”.