Hoja en blanco: hacia una nueva institucionalidad y régimen tributario para Chile

Abstract

In general, each new administration begins its term with a new tax reform that was part of its campaign program, which might stress the country’s social and political development. The repeated changes of the rules of the game introduces uncertainty in the economy, which has a negative impact on investment and saving decisions. Based on an academic and practical analysis, which considered the theory of optimal taxation, the existing empirical evidence, and the best practices in developed countries, this work proposes a new tax system for Chile. This new tax system seeks to be as neutral as possible in terms of minimizing the distortions that taxes generate and, together with the proper public policies, it could incentive investment and contribute to reach conditions of social equity and development. The proposed system is based on an income tax and a tax on consumption as the main pillars, dismissing a wealth tax. Income tax levels the treatment between capital and work, equalizing their tax rates and fully integrating corporate taxes with personal final taxes. Regarding taxes on consumption, we propose an amendment to both the rate and basis over which they are applied, reducing the first, broadening the second, and covering certain activities that are currently exempted. The system is supplemented with a thorough review of the institutional tax model including its jurisdictional aspects, where we propose the creation of a fiscal authority that is autonomous from the Executive Power and with constitutional rank. Finally, based on available data and previous studies for Chile, we estimate the tax revenue arising from this proposed new tax system. Even though the estimated figures cannot be considered conclusive and require further analysis, they predict a significant surplus compared to the current tax revenue.