Former Chilean president and presidential candidate Sebastián Piñera pledged Wednesday to double the rate of growth during his administration if he triumphs in the upcoming elections, supported by a rebound in investment and a possible adjustment in corporate taxes.
Sebastián Piñera, a market favorite and leading the polls for the November election by a wide margin, emphasized the importance of greater dynamism of the world’s largest copper producer, as each additional growth point brings the US $ 700 million in tax revenue.
“Our main goal is for Chile to reach a high level of human development … Our mission is that by 2025, Chile will be the first country in Latin America to overcome underdevelopment,” Piñera said during the presentation of the plan.
The former conservative president, who ruled between 2010 and 2014, remarked that the mining country lost “the flight” in the last four years, with an average expansion of 1.8% and an investment cycle that will complete in that period its worse performance in half a century.
The pledge follows earlier this month the government estimated that the economy would grow 3 percent in 2018, supported by a rebound in copper prices, higher public spending and better expectations for global trade, a figure that would double the expansion of this year.
In addition, Sebastián Piñera set the goal of increasing the investment rate by 3 percentage points in his eventual government, along with doubling the capacity of job creation and establishing incentives for small and medium enterprises.
He stressed that he plans to “simplify” the tax system and make adjustments to a labor reform, which has been the target of criticism from businessmen after the changes promoted by the government of socialist Michelle Bachelet and that the candidate and government candidate Alejandro Guillier seeks to deepen.
Therefore, along with seeking a simpler tax system, Sebastián Piñera said it will push to reduce the first-rate tax rate (from 27% for companies in 2018) to the OECD average (24-25%).
It will be sought “that the tax rate of the corporate sector tends to be in the range of the average of OECD countries … is a project that will be applied gradually and to the extent that the fiscal availability and economic growth allow, “said Sebastián Piñera.
He added that the current tax rate on individuals will continue unchanged in their eventual administration.
The ex-governor, who owns one of the country’s biggest fortunes, said he will also focus on gradually converging towards a balance between income and expenditure over a period of 6 to 8 years, to stabilize and then reduce government debt levels relative to GDP.
“We want to recover the structural balance, it will not be easy, we are preparing to govern in difficult times,” Sebastián Piñera said, referring to possible fiscal surprises.