Page 7 - MONTT GROUP LATIN AMERICAN MAGAZINE JANUARY, 2020(Ingles) .pdf

of USD $ 140 million in 2020 and of the same amount next year.
• Measures to encourage investment:
-A system of instantaneous depreciation of 50 percent of the value of new or imported xed assets, acquired between October 1, 2019 and December 31, 2021, and the remaining 50 percent, in accelerated form is established.
-It is reduced by approximately six months of the term to receive a VAT refund by paying on investments in xed assets.
-Extension until 2035 of bene ts to extreme areas that expired in 2025.
• Older Adults: The payment of their Property Tax is exempted or reduced and the Supplementary Global is eliminated from the income of up to approximately USD $ 850, with a 50 percent reduction to those who have income of up to USD $ 1,800. • Properties with High Appraisal: A surcharge will be applied to homes with a tax valuation higher than USD $ 550,000.
• High Income: A new tax tranche of 40 percent of the Complementary Global Tax and Single Second Category Tax is created for people with annual incomes greater than USD $ 20,000 per month, which will imply a collection of USD $ 146 million.
• Information for the Internal Revenue Service : This organization is empowered to request information on foreign investments made by companies, particularly in countries with preferential tax regimes.
• Others: Taxes to charge digital platforms with address outside Chile (Net ix, Airbnb, Spotify and Uber Eats) were created as well as adjustments were made in the inheritance tax and donations. Alterations to the General Anti-Circumvention Standard were voided; a tax on contaminating xed sources (green tax) was included; shifts were made in the administration of third party funds and individual portfolios; territorial tax and municipal income also su ered some modi cations.
This approval implied a fundamental change in relation to the project presented to Congress in August 2018, by the then Minister of Finance, Felipe Larrain, who made a neutral proposal from the point of view of tax collection, incorporating changes to the General Anti-Circumvention Standard and integrating the tax system for all taxpayers. This meant that up to 100 percent of what was paid as a tax for corporate pro ts could be discounted in the personal taxes of their owners.
Pension Reform:
This is an initiative entered to the Labour Commission of the Chamber of Deputies by the Executive, which are adjustments to a previous proposal made by the Government at the end of 2018.
• New Pillar: The initiative aims to move towards a pension system composed of three pillars: Solidarity; Individual Savings, nanced by contributions from workers and employers and administered by both, the Pension Fund Associations (AFPs) and a new public entity, and a third one, Collective and Solidarity Savings. It is a mixed system because it is an allocation made by workers, employers and the State.
• Additional Contribution and Collective Savings Fund: The initiative establishes an increase in the current contribution rate from 10 to 16 percent, a raise that will be carried out gradually and charged to the employer. Of that gain, three percent will be used to complement the personal savings of each worker, and the other three percent to integrate a new Solidarity Collective Savings Fund.
• Special Bene t: The Solidarity Savings Fund will provide an additional pension to current and future retirees in precarious conditions. It will bene t, in a very special way, women in the middle class and older adults with severe dependence.
• Autonomous Public Institution: The additional contribution will not be administered by the Pension Fund Associations (Asociación de Fondos de Pensiones, AFP). The Government proposes the creation of an Autonomous Public Institution, which would have demanding requirements for sustainability, professionalism, e iciency and transparency. • Greater Competition in the Administration of Contributions: The Pension Fund Administration industry is opened to new actors such as non-pro t societies, a iliate cooperatives and others to reduce the fees charged and allow a iliates to participate in the creation of new AFPs.
Surprisingly, the Labour Commission of the Chamber of Deputies rejected the main aspects of the initiative arguing that the six percent increase should be allocated in its entirety, and not half, to a solidarity or distribution fund. The Treasury Commission of the Chamber of Deputies, the second instance that reviewed the project, nally approved it, thanks to an agreement between the Government and the Christian Democracy Party. Part of that understanding contemplated the increasing of bene ts
to women in precarious conditions and to extend from 10 to 20 years the term to restore the resources of the Funds that will supply the de cit of the rst years of the solidarity system. It was also accepted to strengthen the public entity that will manage the additional six percent and transfer the unclaimed monies to the Collective Savings Fund.
Thus, after 15 months of debate in the Chamber of Deputies, the Pension Reform passed to the next legislative stage,the Senate that will see it in March, after the legislative recess.
Critical Infrastructure
Likewise, by 28 votes in favour, 12 against and one abstention, the Senate approved the idea of legislating the Constitutional Reform that seeks for the Armed Forces to protect critical infrastructure without the need to decree a state of exception or a ect rights and constitutional guarantees.
Anti-Looting Law
The Senate approved the Anti-Looting Law, an initiative that typi es and modi es the sanctions for the actions of burglarizing and install barricades. The provision establishes that those who cut the tra ic “through violence or intimidation in people” risk penalties between 61 and 541 days of jail. Meanwhile, for looting, the punishment could reach ve years in prison. The initiative now goes to the Chamber of Deputies, and if approved without major changes, it would be ready to become law.
Water Code
The idea of legislating the Constitutional Reform project on water domain and use was rejected. The bill that reformed the Constitution did not reach the necessary votes for approval in the Senate. This is an important and key issue that will be discussed again in the new Magna Carta.
New Criminal Code
The president of the Supreme Court, Guillermo Silva, announced the next drafting of a new Criminal Code due to the “di icult times the country is living and living”. The highest authority of the Supreme Court indicated that the current Criminal Code dates from 1874 and that, over the years, it has been only “patched”.
Montt Latin American Magazine p7
Anti-Government Protests Continue in Chile