In climactic vote, Chile’s congress passes controversial tax reform

Government answers student movement with more than US$1 billion to education.

After more than four months of political wrangling and heated rhetoric from both sides of the aisle, the ruling administration of President Sebastián Piñera passed its controversial tax reform in Congress on Tuesday. The bill, which passed by broad majorities in both the Senate and Chamber of Deputies, will increase the top corporate tax rate to 20 percent and allocate US$1.23 billion to education spending.

“We achieved a necessary and important agreement to approve a tax reform for education,” President Piñera said after the vote. “The billion additional dollars will be designated toward the improvement of the quality and equity of our education on all levels.”

The vote comes after a final effort by a “mixed committee” of five senators and five deputies to salvage the bill, which was rejected by the Senate last week. The committee unanimously approved the amended version, which added tax rebates for the lower-middle class and established a new mandatory electronic invoice system projected to create an additional US$450 million in revenue by reducing tax evasion.

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