In its latest economic survey of Chile, the OECD praised the government's introduction of a research and development tax credit for the private sector that requires the participation of research institutes external to the company seeking the credit.
The report recommended fiscal policies that would further bolster the country's economy, including strengthening the unemployment benefits system, increasing public spending in education and poverty reduction.
To enact these policies, the government will need to raise tax receipts. The OECD believes that broadening the tax base would increase revenues that could be used for public spending as the country begins to move towards a higher standard of living. The government has made steps towards this goal, such as limiting the VAT tax credit for housing construction.
The OECD concluded that Chile is rebounding well from the global recession. The country became the newest member of the organisation three weeks ago. Its membership will become effective once it has been approved by parliament.
