The Minister of Finance, Felipe Larraín, met this Monday (25.3.2019) with the director of the Tax Policy Center of the Organization for Economic Cooperation and Development (OECD), Pascal Saint Amans, who is in Chile to participate in the 12th Plenary Session of the Forum of Tax Administrations (FTA).
At the meeting, Larraín and Saint Amans conducted an in-depth analysis of the Tax Modernization (TM) project and the OECD firmly supported the initiative that the Executive introduced to Congress in August of last year, according to the Chilean Government's statement.
“We strongly support the tax project that has been presented. We see some challenges in full integration, returning to a system that is better known by countries around the world. We believe that this aspect is positive.”, said the director of the OECD Tax Policy Center.
Saint Amans highlighted the positive effects of the proposals contained in the draft tax bill. “Most of the measures in this tax bill will have a positive impact on growth and employment,” he said. He also praised the modernization of the relationship between the tax administration, in this case the SII, and taxpayers.
He added that “from the OECD perspective, we encourage the Government and Congress to adopt these measures. Tax reforms are always difficult, but we are confident that the positive aspects of the Government's project should have a favourable impact.”
Minister Larraín recalled the letter sent by the OECD in January of this year supporting MT.
“In our view, several measures of the proposed tax reform will support investment and growth,” the letter said, highlighting a number of proposals, including a return to a single, fully integrated tax system, a new and improved regime for small and medium-sized enterprises, rules designed to improve tax certainty, accelerated tax depreciation and a faster refund of VAT on the acquisition of fixed assets.
“This is likely to have a positive effect on investment and employment (…) Overall, a single, fully integrated tax system is expected to support increased investment, restore neutrality, reduce tax compliance costs and provide greater tax certainty,” the letter states.
"We believe that this support from the OECD is very important, as the idea of legislating the Tax Modernization project will be voted on next week," said Minister Larraín.
The Minister of Finance reiterated the willingness to dialogue shown by the Government in the discussion of this project and emphasized the need to reach a broad agreement. “We are willing to move forward and we have shown a lot of flexibility (…) We want to reach the broadest possible agreement on the idea of legislating, as broad as the will of the people involved. If there is someone who never wanted to approve the idea of legislating, we cannot force them. That is why we have been working with all the opposition parliamentarians of the Finance Commission and now the time has come for each one to make their decision,” said the authority.
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