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Alberto Arenas
is a new entry this year
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The mastermind behind
Chile's most ambitious tax reforms for 30 years is finance
minister Alberto Arenas, who believes the changes he is
implementing will bring "stability and sustainability" to the
South American nation.
Already responsible for sweeping reforms of the pension
system to provide a minimum level of income during his time as
the Director for the Budget during the Socialist Party's last
period in power between 2006 and 2010, President Michelle
Bachelet chose Arenas to step up to lead the Ministeiro de
Hacienda .
After being sworn in along with the rest of the new Cabinet
on March 23 he took just nine days to submit his eye-catching
tax reform Bill to Parliament on April 1.
The Bill bucked the global trend of making tax systems more
competitive and instead raised several taxes, including the
headline rate of corporate tax which will reach 27% by 2017, up
from 20%, with the effective tax rate even higher.
After the Bill had been discussed by the government and the
senate, an official version was released with no fewer than 278
modifications to the original – a mark of the intense
discussion it had provoked and
improvements it had undergone.
A key addition to the Bill was the introduction of two
corporate tax systems for taxpayers to choose between: an
attributed profits system, as proposed in the original Bill,
and a new, partially integrated tax system.
Additionally, a general anti-avoidance rule (GAAR) has been
implemented and there are a number of indirect tax changes,
mainly environmental in nature.
Of these, the new carbon tax will likely affect taxpayers
the most, and a tax of $5 per tonne of CO 2 emitted
will also have businesses reminding themselves to turn the
lights off as they leave the office at night.