By Javier Jaque, Managing Partner of CCL Auditores Consultores.
Read the letter at Diario Financiero.
The new tax reform bill is being introduced at a time when the current administration is nearing the end of its term and, therefore, in one way or another, it commits the direction of economic resources for the next administration. The initiative is presented as a “tax benefit for SMEs.” However, upon reviewing the bill in detail, it becomes clear that the opposite is true. While it is understood that there is a simplified tax regime for micro, small, and medium-sized enterprises (MSMEs), presented in positive terms, this regime already exists. Therefore, what is being done at the last minute is to establish a threshold for those who can remain within it, while those exceeding these limits are moved to a regime with an increased rate of 20%. Recently, a law was approved setting SME tax rates at 12.5% on a temporary basis.
What this new law does is raise those rates to 20%; in other words, it begins by targeting SMEs that currently reach UF 75,000, which is a major mistake that will affect entrepreneurs and further pressure the labor market.