Massive Tax Overhaul Approved: Commission Endorses Cuts for the Wealthy and 25-Year Tax Shield

Original article: Megarreforma para los ricos: Comisión aprueba baja de impuestos y blindaje tributario por 25 años After a marathon session that stretched into the early hours of Thursday, the Finance Commission of the Chilean Chamber of Deputies approved the massive economic-tax reform championed by José Kast and Finance Minister Jorge Quiroz. This controversial package includes tax cuts and a 25-year tax shield primarily benefiting large companies and high-income individuals. The session was marked by intense tensions between the ruling party and the opposition, who submitted more than 160 amendments to the «national reconstruction» bill, which is perceived as a «massive reform for the wealthy.

» Among the approved measures are contentious policies such as the reduction of the first-category tax from 27% to 23%, which received backing from eight votes from the National Libertarian, Republican, UDI, RN, and PDG parties (with support from Deputy Juan Valenzuela). Opposing votes came from Carlos Bianchi (Ind. PPD), Jorge Brito (FA), and Boris Barrea (PC), while DC Deputy Priscilla Castillo abstained.

The reduction will occur gradually over three years: by 2027, the rate will drop from 27% to 25. 5%; in 2028 it will further decrease to 24%; and by 2029, it will reach 23%. Additionally, the parliamentary body approved—thanks to votes from the ruling party and Deputy Valenzuela—the re-integration of the tax system, also to be phased in gradually.

This measure allows that the first-category tax paid by companies can be fully applied to the personal taxes of their owners, a process expected to conclude by 2031. Critics see this as a double advantage for wealthier contributors. The commission also progressed with the majority vote on tax invariability, a controversial safeguard that guarantees a stable tax regime for 25 years for investments exceeding $50 million, a concept criticized as a “cuff” for future governments.

The Kast administration argues that this mechanism offers a signal of certainty to attract both foreign and domestic capital. However, both the lengthy terms and the relatively low investment threshold ($50 million) have raised concerns about the potential rigidity it may impose on fiscal policy to advantage one economic sector. Not all measures favored the business sector.

The elimination of the Sence tax credit, aimed at removing tax benefits for training costs to increase revenue, was rejected. RN deputies Diego Schalper and Eduardo Durán distanced themselves from the Executive’s proposal and voted with the opposition, effectively burying that idea, as reported by Diario U. de Chile.

The Kast administration also faced a setback with the rejection of changes related to intellectual property, artificial intelligence, data mining, and agreements from the Ministry of Public Works. The «massive reform for the wealthy» still needs to be reviewed by the Labor and Environment commissions before a vote in the chamber next week, amid a backdrop of high tension and criticism from both political sectors and the public. Indeed, the latest Agenda Criteria Poll, dated May 10, 2026, revealed that 46% of the population does not buy into the right-wing president’s narrative and believes the project primarily benefits Chile’s large companies.