(Corrects spelling in first reference to Buffett.)
Chile’s President Sebastian Pinera is considering tax changes as the world’s top copper-producing nation looks to balance the need to fund increased spending on education and maintain a competitive investment climate.
“We are taking a look at the tax system,” Pinera said in an interview last night with Chilevision. “It’s an issue that’s in analysis. It’s not resolved.”
Pinera has responded to months of student protests by proposing an extra $4 billion over the next four to six years on loans, grants and improved supervision, which Finance Minister Felipe Larrain said doesn’t require tax increases. Student and teachers’ unions are pushing for increased spending on education and a greater role for the state.
Pinera, who introduced changes to mining royalties and imposed a temporary corporate tax increase to finance rebuilding work following an earthquake in March last year, said any further reform would have to consider the state of the global economy and the need to maintain Chile’s investment competitiveness.
The Harvard University-trained billionaire investor described as “reasonable” a call last month by Warren Buffett for taxes on the U.S.’s wealthiest individuals to be raised.
The protests and labor strikes that have made Pinera the least popular president since Chile restored democracy two decades ago. Still, the economy expanded 8.4 percent in the first half of the year, the fastest pace in 16 years.
GDP will expand 6.6 percent in 2011, according to government estimates. More than half a million jobs have been created since he took office, Pinera said.
While Chile isn’t immune to the increasing likelihood of a global recession, the local economy is well positioned, he said.
Pinera’s approval rating slumped to 26 percent in a poll last month by Santiago-based CEP.
To contact the reporter on this story: James Attwood in Santiago at Jattwood3@bloomberg.net.