The Treasury projects raising more than US$600 million with these two measures, which it aims to promote to bring forward future revenues. Experts believe the target can be achieved for the first measure, but there is no consensus on the second.
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The Minister of Finance, Jorge Quiroz, stated this Sunday that they expect to raise more than US$600 million through the two tax measures they plan to promote in order to anticipate future revenues.
First, he said they project generating US$300 million or more by cutting the donation and inheritance tax rate in half.
The other measure, also estimated to raise US$300 million or more, is the new window for capital repatriation. “We will provide a period of around nine months (during which the capital is repatriated) and pay a rate that we are considering to be around 8%,” he explained.
Tax experts consulted believe the expected revenue from the first measure is achievable, but there is no agreement regarding the second tax. They also note that in both cases, the level of revenue will depend on how the two measures are implemented.
Luis Felipe Ocampo, partner at Recabarren & Asociados, believes that in donations and inheritance “it depends on how it is structured; I think it is possible to raise a sum like the one mentioned.” However, he estimates that “for repatriation, the pool is fairly exhausted; reaching US$300 million seems unlikely based on known data. That said, regarding funds that were declared and remain invested abroad, with an attractive regime to bring them back, it is possible that the numbers could improve under this specific mechanism.”
Attorney Christian Aste, partner at AJC, Aste, Jaramillo y Asociados, considers that achieving the announced revenue “is possible on paper. But recent evidence in Chile shows that projections can fail significantly.” He recalls that “during the Boric administration, a similar proposal was made regarding capital repatriation, but the result was disastrous, as less than 15% of the projected amount was collected.”
For this reason, Aste believes that “there is no technical guarantee that this figure will be reached; it depends almost entirely on taxpayer behavior. The experience with the substitute tax was different, as it did raise more than expected. However, it affected public trust, since that money was supposed to be used for the reconstruction of Viña del Mar, and that did not happen.”
Alberto Cuevas, partner in the legal and tax area at KPMG in Chile, states that the government’s ability to achieve the projected revenue depends on three factors. First, the design—“if a proper diagnosis was made to capture a real need and calculate potential tax bases and rates, the revenue could be achieved or even exceeded.”
Second, Cuevas believes it depends on implementation, “which involves aspects such as proper communication of the measure, declaration and payment rules that align with reality and are as simple as possible, dialogue with the private sector to properly determine how to declare, what information to request, deadlines, etc.” Third, the expert highlights “the need for a favorable political and social environment that justifies these measures.”
Meanwhile, Christian Delcorto, consulting partner at CCL Auditores Consultores, regarding capital repatriation, explains that in the most recent process carried out under the 2024 tax compliance law of the previous government, “which was only in effect for two months (November and December 2024), according to the SII report, it raised CLP 92.496 billion, equivalent to US$94 million, with a tax rate of 12%.”
In contrast, “the first capital repatriation process carried out during the second administration of former President Bachelet, which lasted one year, raised around US$1.502 billion, applying an 8% rate. Therefore, considering these figures, and if the process lasts at least one year and includes assets such as real estate and tangible movable property, it is entirely feasible for this measure to raise US$300 million.”
Delcorto also states that the government could meet its revenue estimates “if it effectively halves the donation tax rates from the current schedule, and at the same time does not change the valuation bases or rules for assets (Law 16.271 includes special rules for real estate, vehicles, and publicly traded shares),” which “would be very appealing to the public, since instead of taking risks with simulated real estate sales to transfer wealth within families, paying a reduced tax rate would be quite effective.”