The rejection of all the conservative legislators to the tax reform. President Gabriel Boric affirmed: “It is not mainly the government who is beaten or dealt a defeat, but millions of Chilean men and women who have been waiting for years for a fairer country.” Minister Ana Lya Uriarte indicated that “The idea that there is a reform whose resources would finance the increase in the PGU, the reduction of waiting lists in hospitals or the increase for primary health was rejected.” The parliamentary committee PC, FRVS and AC established that “those who refused or refused to go to vote, did so taking care of the pockets of big business and the great wealth of this country.” From the business unions it was stated that the vote of the right and the extreme right “constitutes an opportunity for things to be done well and seeking consensus with all sectors.” In a statement, from the CUT it was asserted that not proceeding with the tax reform “is extremely serious, since it condemns millions of retired workers in the country to poverty.”
Team “The Century”. Valparaiso. Santiago. 3/9/2023. There was a coincidence in the official political forces and the social and union world: the achievement of the right-wing and extreme-right parties to reject the tax reform was not primarily a blow to the Government, but to millions of Chileans since it was not it will be able to count on more resources for plans and social measures for the benefit of the population.
“When the country begins to show signs of recovery, when we begin to get ahead of a long crisis, once again there is a sector that tries to make sure that things do not change, to leave things as they are,” said President Gabriel Boric, who He added that “sometimes it seems that the objective of some is to hit the government and prevent changes” in a tacit allusion to the conservative opposition.
Then, the president emphasized the real consequence of rejecting the tax reform. “I want to tell you that you are wrong, because it is not mainly the government that is being beaten or defeated, but millions of Chilean men and women who have been waiting for years for a fairer country, a health system that protects them, a country with pensions worthy”.
The Chief Executive emphasized: “The Chamber of Deputies has rejected the idea of legislating our Government’s tax reform bill. What does it mean to reject the idea of legislating? They refused to discuss the possibility of holding a debate where the temple of democracy is supposed to be, where these things should be discussed for the common good, which I hope we share.”
“In these episodes, the harshest differences between political sectors come to light, which end in the worst nonsense and which harm Chilean men and women, beyond the legitimate differences we have,” said President Boric.
Finance Minister Mario Marcel, also criticizing the right and the extreme right, said that “ideology prevailed over dialogue and pragmatism.” He stated that “the Executive presented close to 90 indications to this project, participated in the processing of this project for 8 months and a process of dialogue with the citizenry preceded that. Therefore, those who simply took refuge in slogans and ideologies are the ones that have unfortunately been imposed today”. And he sentenced: “it is bad news for citizens who aspired to a fairer tax system.”
He warned that “the direct implication of (the vote against the reform) is that it cannot be legislated on this matter again for another year.” In the context that moving forward with the initiative in the Senate is very difficult, because 2/3 are required and the right has half the votes.
The Minister Secretary General of the Presidency, Ana Lya Uriarte, said that “the idea that there is a reform whose resources would finance the increase in the PGU, the reduction of waiting lists in hospitals or the increase for the primary health. That is what was voted against, that is what was rejected, and along with that each of the components of the project was rejected. Therefore, this vote is bad news for pensioners, for investment and productivity”.
In the Chamber of Deputies and Deputies, the tax reform project had 73 votes in favor, 71 against and 3 abstentions. The deputies Viviana Delgado (Green Ecologist Party), Pamela Jiles (Humanist Party), and Mónica Arce (linked to Green Ecologist) withdrew from the session and contributed to the objective of the right. The opposition’s achievement was made possible by the abstentions of Andrés Jouannet (Democrats), Gaspar Rivas (former People’s Party) and Enrique Lee.
The initiative included a project to collect 0.6% of GDP (Gross Domestic Product) by 2023; but it was adjusted by five tenths in 2024, 1.4% of GDP; in the same magnitude in 2025, at 2.7% of GDP; and then by six percentage points to 3.5% in 2026. It also made it possible to have more budget for pensions, health, public safety, work and other social plans.
“Denying the option to improve the quality of life”
From the Parliamentary Committee of the Communist Party, Green Regionalist Federation and Democratic Action, it was indicated in a statement that “the fact of refusing to even discuss the possibility of a redistribution of tax resources, which specifically affected high net worth people, is denying the option of improving the quality of life of citizens”.
It was stated that “it is urgent and necessary to raise more resources to have greater and better state coverage to finance social policies that help our people. The desire for better pensions, better health, housing and quality of life can only be achieved with a new redistribution of resources”.
“Those who rejected or refused to vote did so by taking care of the pockets of big business and the great wealth of this country, who will be able to continue paying percentage less taxes than an ordinary citizen. Evasion and elusion have triumphed once again”, it was indicated in the communiqué of the PC, FRVS and AH benches.
It was expressed: “To those who abstained, we clearly pointed out that they turned their backs on the people and their demands, and played aligned with the right. Those who lose are the people of Chile, their women, the users of public services and small and medium-sized businesses”.
From the Central Unitaria de Trabajadores (CUT), it was stated that “this momentary triumph of the right ratifies the idea that this sector of society only seeks to defend the privileges of big capital and maintain the the state in which neoliberal in tax matters, where proportionally the workers pay more than the big businessmen”.
It was said that “this rejection also compromises a large part of the Social Security agenda that the Government has promised in its program, such as the proposal for a guaranteed universal basic pension, among others.”
In a statement from the multi-union it was stated that not following through on the tax reform “is extremely serious, since it condemns millions of retired workers in the country to poverty.”
“This rejection ratifies the immoral relationship between political parties of the right and center and the big capitals of Chile, who have financed the political activity of the last 30 years, with the objective that parliamentarians legislate for their interests instead of the interests of the citizen majorities”.
Pointing out that in the face of these situations there is popular mobilization, the CUT statement stated: “We call on the entire trade union movement, the territorial social organizations and the various social organizations that make up Chilean society to demonstrate against this action that seeks to seal or padlock the privileges of the great businessmen of Chile”.
“Octobrist era”
The right and the extreme right opted for political spokespersons and hitting the Government, establishing that the tax reform project “was Octobrist” (in relation to the demands of the social revolt of 2019). Agustín Romero, representative of the Republican Party, maintained that they voted against it to “stop paying money to political operators or to human rights institutes that do not give money to Chileans,” without referring to financing for pensions, workers, and public safety.
Explaining a more political than technical action regarding the reform, the National Renewal (RN) deputy, Frank Sauerbaum, said that “this is a clear sign that a new opposition bloc has formed that joins if there is a threat to Chili. This reform threatened SMEs with an Octobrist and refounding reform”.
Guillermo Ramírez, legislator from the Unión Demócrata Independiente (UDI), had called days ago to reject the tax and pension reforms, and now he has focused on defending the large business sector and financial groups to indicate that by throwing out the tax change these sectors are protected and “Chile will once again be a reliable place to invest.”
In a contemptuous tone, the deputy Gaspar Rivas declared before the press that “the Government accompanied its steak (the tax reform) with poorly cooked and poorly done rice, like those regulations that what they said was harming the country’s entrepreneurs. And unfortunately it was that rice, that accompaniment that ended up spoiling the taste of the meat”.
The applause of the big business
Big business and financial groups did not like the tax reform and even less that taxes were applied to the super-rich and that multimillion-dollar income and profit segments were sought to contribute to social spending.
The president of the Confederation of Production and Commerce (CPC), Ricardo Mewes, said that “we understand the objective of raising more resources to cover social needs, but this cannot be done at the cost of taxing savings and investment, damaging growth and the generation of jobs”, in line with the fact that contributing from the world of big business affects them and detracts from investing and generating employment.
Cristián Allendes, President of the National Agricultural Society (SNA), opined that “in this vote, the transversal conviction prevailed that Chile needs a tax reform that promotes investment, growth and development of the country and its people.”
The president of the Chilean Chamber of Construction (CChC), Juan Armando Vicuña, indicated that “a project that started from an assumption in our wrong opinion was rejected, as it is that the resources to improve the quality of life of people can be obtained from a tax reform focused on taxing savings and investment”.
Christian Aste, president of the Tax Commission of the National Chamber of Commerce (CNC) stated that the vote of the right and the extreme right “constitutes an opportunity for things to be done well and seeking consensus with all sectors.” Rafael Cumsille, a leader of medium-sized businessmen linked to the right, thanked opposition legislators for rejecting the tax reform.