Chile Senate approves Kast-backed economic reform package

Chile's Senate approved a package of economic reforms backed by right-wing President Jose Antonio Kast, sending the bill to the lower chamber of Congress for further approval.

The reforms include several tax cuts, including a gradual reduction in company levies and a 20-year freeze on the tax rate for investments of more than $350 million. Opposition lawmakers have criticised the package as favouring wealthy people.

The bill still needs approval from the lower chamber, where right-wing parties supporting Kast hold a majority.

Finance Minister Jorge Quiroz defended the package after senators approved it early Thursday, saying Chile needed growth and that the bill would help make that possible.

Opposition Senator Beatriz Sanchez argued during debate that each one-percentage-point reduction in the business tax rate would cost the government $420 million in revenue. Pollster Cadem said 56 percent of Chileans oppose the tax cuts.

Kast's approval rating is falling, and the government has lowered its forecast for economic growth through 2030, when his four-year term is due to end.

Ariela Jofre, a 21-year-old chef's assistant in Santiago, criticised the reforms. She said more investment may result, but that state resources for health care, education and other programmes are also important.

The opposition also criticised a clause under which companies that lose environmental permits would have their lost investments covered by the government.

The International Monetary Fund has said the reform package could increase economic growth but may damage government finances.

Kast, endorsed by US President Donald Trump, took office in March after campaigning on crime and immigration. His election marked Chile's sharpest shift to the right since the 1973-1990 dictatorship of Augusto Pinochet.