Boric vs. Kast: Presidential proposals comparison

by and | Dec 16, 2021

This Sunday, December 19th, 2021, the second round for the election of President in Chile will take place. Both candidates, Gabriel Boric and José Antonio Kast, improved their government programs, adding and correcting the proposals looking forward to their future leadership of the country.

Following, Fischer y Cía.´s Corporate and Tax teams prepared a comparison to analyze the programmatic ideas from a business and tax perspective.

Gabriel Boric

José Antonio Kast

SME’s

SME’s
Gabriel Boric
SME’s
José Antonio Kast
  • Simplification of the regulatory burden so that procedures are easy and expeditious, going forward in standardization and digitalization of the procedures and permits.
  • Expansion of access and improvements of conditions to the segments excluded from the banking system, improving the guaranteed credit system (FOGAPE, FOGAIN, and others) and strengthening of the credit programs for Mipyme of Banco Estado and those of direct financing from CORFO, SERCOTEC, FOSIS and other institutions.
  • Implementation of the national plan for digital transformation and coordinated work with the network of state technical training centers to generate cooperation, training and training for MSMEs and cooperatives in their management, administration and productive processes.
  • Promotions of the developments of innovative ecosystems to foster and accompany the creation of new  scientific-technological-based ventures (start-up), their growth, developments and scaling (scale-ups).
  • Improvement of the participation of MSMEs and cooperatives in public purchases through positive discrimination mechanism for MSMEs in all contracting and purchasing mechanism.
  • Strengthening of local and regional spaces to support SMEs, working together with regional governments and municipalities, advancing in the development of institutional capacities and in articulated and coordinated promotion policies at each level.
  • Simplifications of pro-SME regimes that will facilitate tax compliance, the formalization of companies, and the creation of new ventures and startups
     
  • Establishment of a fund to support entrepreneurs and startups, and foment the innovation system.
     
  • Joint work promotion with the private sector and universities in the creation of a technological ecosystem that stimulates local entrepreneurs and creates an appropriate environment for the emergence of startups.
     
  • Delivery of the necessary facilities to access the digital transformation, soft loans and ProChile programs.
     
  • Establishment of Chile Serves SMEs, Cooperative and Entrepreneurs to guide the procedures and make State aid visible.

Taxes

Taxes
Gabriel Boric
Taxes
José Antonio Kast
  • New income tax regime for large companies
  • Regarding income tax, the following are proposed: i) advance in the disintegration of the tax system ii) design instruments that mitigate the problem of indefinite postponement of the payment of personal taxes and capital income iii) review the taxation of capital income in its different forms.
  • Eliminate exemptions that generate unjustified tax expenditure, through legal reforms and administrative measures that reduce evasion and avoidance.
  • Implementing a tax on the high networth that has the challenge of strengthening the Chilean IRS’s inspections tools.
  • The establishment of green taxes to internalize costs and discourage pollution.
  • Study a new way of composing the taxable base of the royalty to large mining.
  • Establish a mechanism to ensure that large companies are obligated to pay effective VAT on invoices issued by MSMEs and that SMEs are not obligated to pay VAT without having the cash to do so.
  • Promote the transparent regime so that more MSEMs are part of it and are not harmed by the semi-integrated tax system.
  • Commitment with a responsible fiscal policy which allows a convergence of a level of gross public debt below 50% of GDP in the medium term.
  • Reduce the corporate tax that affects investment, always consistent with commitment to fiscal sustainability.
  • Consider the review or elimination of tax exemptions (without taking in consideration the current free zones that must be maintained for geopolitical reasons), measures to reduce tax invasion and tax simplification.

Economic measures and legal modifications with tax effects

Economic measures and legal modifications with tax effects
Gabriel Boric
Economic measures and legal modifications with tax effects
José Antonio Kast
Perfect the 30-day payment law and implement a payment management program so that the entire public sector complies with the law, without exceptions.
  • Improve the 30-day payment, so that the spirit of said regulation is effectively complied with. From the state, commit the examples in terms of good payer, so that, once received according to the goods and services acquired from private companies, they are paid in cash, strongly encouraging the participation of small and medium-sized in the public purchasing processes.
  • Deepen and expand free trade agreements to promote Chilean participation in the main global markets, ensuring protection of our investments and exports. Chile’s economic insertion abroad requires a boost to participation in bilateral and multilateral organizations and agreements that reduce obstacles to international trade and establish double taxation agreements that encourage investment in our territory. Thus, promote the signing of the TPP-11 treaty.
  • Strengthen public institutions such as Sernac, the National Economic Prosecutor's Office and the Free Competition Court, in order to ensure the effective application of penalties and fines to anyone who colludes, abuses or cheats, ensuring greater and better competition. Along the same lines, guarantee compliance with the law and we will take additional measures to fight illegal trade that damages small entrepreneurs and established merchants so much. Finally, strengthen the Financial Analysis Unit for the prosecution of economic crimes, drug trafficking and money laundering.
  • Enhance the substantial contribution of civil society by promoting smart philanthropy. Along these, support the bill that is in the Senate that promotes solidarity and generosity, eliminating the punishment for many donations that the current legislation contains.
  • Reform the R&D law to promote innovation and the incorporation of new technologies in companies with greater force. To this, the establishment of tax incentives for the development of innovation will be added, making the existing instruments managed by CORFO more flexible, in addition to promoting joint work between universities, companies and research centers.
  • Promote compulsory financial education in secondary education, as we want to prepare our young people to make good savings and debt decisions, and timely protect them from abuses, scams and bad decisions that do so much harm, especially to the most vulnerable.

Public and private investment with emphasis on ecology and sustainability

Public and private investment with emphasis on ecology and sustainability
Gabriel Boric
Public and private investment with emphasis on ecology and sustainability
José Antonio Kast
  • Housing Emergency Plan and the construction of households from the public sector, generating employment and increasing the surface of new and existing social interest housing, integrating criteria of sustainable production and energy efficiency.
  • Substantial investment in rural drinking water to ensure the human right to water and sanitation; also in natural infrastructure that allows us to recover our waters and ecosystems; as well as in irrigation works for small and medium agriculture.
  • Investment in green infrastructure works, with effects on adaptation and / or mitigation of climate change: infrastructure for urban mobility with low environmental impact, improvement of the coastline through works that protect the coast of the localities against storm surges, waterspouts and the increase sea level, as well as works that increase the quality of life of the communities: improvement of accesses and pedestrian walkways, lighting, etc.
  • Increase investment in thermal reconditioning and replacement of heaters, contribute to the installation of electricity generation systems and renewable energy at the residential level, which will create jobs and, at the same time, reduce household electricity bills.
  • Establish a water efficiency program for domestic hot water.
  • As a form of support for tourism throughout the country and with sustainability objectives, we will invest in infrastructure and we will promote energy efficiency and renewable energy projects for MSMEs in the sector, among others.
  • Investment in adapting the cultural infrastructure that allows optimal ventilation and distance conditions to ensure its operation, and in programs that promote outdoor activities, concerts, performing arts cycles and festivals, among others.
  • Boost investment, job creation and wage improvement as first priority. Therefore, special relevance will be assigned to the recovery of legal certainty and the development of an attractive regulatory framework, which creates the necessary conditions for entrepreneurs and investors to develop their projects in our country and at the same time facilitate the entry of new companies that defy the established ones. All of this will contribute to the creation of more and better jobs.
  • Implementation of an infrastructure program, with special emphasis on water projects such as reservoirs and desalination plants to take charge of the effects of climate change, as well as ports, railways, highways and airports, seeking to increase private investment in public infrastructure to 4,000 million dollars every year in the second half of this decade, considering criteria of sustainability, justice and territorial equity.
  • Promotion from the State an aggressive digital infrastructure plan, taking care of the current deficit in connectivity and fiber optics in many parts of the country. This plan will represent a real boost to integration, decentralization and support for the possibility of studying, working, undertaking and accessing health care remotely. To this end, conditions will be actively promoted for national and foreign telecommunications actors to invest in new digital networks and expand internet and fiber optic coverage throughout the country.
  • Encourage the development of clean energies, such as non-conventional renewable energies, Green Hydrogen and Biofuels, which will give a great boost to the local economy and to the producers who will be able to offer their products to the world with the seal of having been made from non-renewable energies. Promotion of coordination for access to global green financing and sustainable initiatives.

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