Overview
- The Senate approved key articles of the government’s megarreforma on Thursday, July 16, after an overnight debate, with several votes passing 26 to 24.
- The law would cut the first‑category corporate tax from 27% now to 25.5% in 2027, 24% in 2028 and 23% from 2029 while granting tax stability contracts of 10, 15 or 20 years for larger projects.
- Senators also approved a provision to reimburse or compensate companies whose projects are revoked for environmental reasons, a measure that drew sharp opposition criticism during the debate.
- The International Monetary Fund said the package could boost growth but warned it would put pressure on public finances, and public polls show a majority of Chileans oppose the proposed tax cuts.
- Next steps include a return to the Chamber of Deputies for final approval and likely appeals to the Constitutional Court, outcomes that will determine whether the reforms take effect and how they affect revenue for public services and investment prospects.