In the final text, the Ministry of Finance explicitly states something that was not included in previous drafts: that “tax increases will be focused on personal income derived from capital, as well as on higher-income taxpayers.” Four bills are expected to be submitted in January and another three in March.
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“This document is being distributed among the presidents of political parties, business leaders, workers who participated in these previous discussions, and members of the commission chaired by Manuel Marfán. But above all, we are interested in political parties becoming familiar with it, evaluating it, and ideally agreeing to sign this pact.” With these words, the Minister of Finance, :contentReference[oaicite:0]{index=0}, opened the press conference held this Wednesday, where the final document of the fiscal pact was presented.
Accompanied by the Minister of the Interior :contentReference[oaicite:1]{index=1}, Minister of Labor :contentReference[oaicite:2]{index=2}, Minister of Economy :contentReference[oaicite:3]{index=3}, and Minister of Women :contentReference[oaicite:4]{index=4}, the Finance Minister explained that “the topics of the pact are distributed across six areas. First, priority areas of resources aimed at citizens. There is a set of 36 measures to promote growth, including faster permitting for investments, reduction of informality, productive diversification, and infrastructure development.”
“In terms of state reform, there are proposals related to greater efficiency, transparency, and service quality, with 12 proposals distributed across these three areas,” said the Finance Minister regarding the fiscal pact.
Regarding the tax area, he explained that there is a set of 30 proposals “aimed at improving and increasing tax compliance. Some relate to simplifying communication mechanisms between tax authorities and taxpayers, taxpayer education and support, strengthening oversight, and closing loopholes used for tax evasion.”
Marcel also noted that in the tax area “there is an important difference compared to the others mentioned, because instead of reflecting consensus from the working group, these are commitments that the government unilaterally assumes in terms of guidelines, objectives, and priorities.”
At this point, the final document states that changes will focus on income taxes, both corporate and personal. “The government will not insist, therefore, on proposals regarding a wealth tax and a tax on retained earnings stock; however, other measures may be included to enhance progressivity and improve income distribution,” the text states.
It also establishes that the general corporate tax rate will be reduced, narrowing the gap with the median of :contentReference[oaicite:5]{index=5} countries, thereby ensuring business competitiveness and their capacity to generate employment. It further specifies that “the maximum combined marginal tax rate on capital will also be reduced compared to the current level. This reduction will be offset by taxation on personal income derived from capital and higher-income earnings.”
In this regard, it explicitly states something not included in previous drafts: that “tax increases will be focused on personal income derived from capital, as well as on higher-income taxpayers.”
What does this mean? Tax experts explain that a formula similar to that included in the original bill—rejected in the Chamber of Deputies—will be applied.
However, that provision had been approved by the Finance Committee at the time. According to what was stated then, this tax falls within the dual system framework. Its objective is to tax capital income of taxpayers, applying to final taxes paid by business owners on withdrawals, remittances, or distributions they receive. Therefore, according to experts, the government will now seek to replicate this formula by establishing a dual system. In that proposal, a 22% rate was applied.
Javier Jaque, Lead Partner at CCL Auditores Consultores, adds that “it seems reasonable to apply higher taxation on capital income rather than labor income. However, it is highly complex to apply a different rate to income obtained from the sale of shares, dividends, rents, among others.”