Chile’s President Sebastian Pinera is considering tax reforms 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 say those measures don’t go far enough and call for 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 economists and 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 have helped make Pinera the least popular president since Chile restored democracy two decades ago. His approval rating slumped to 26 percent in a poll last month by Santiago-based CEP, the lowest level of the five presidents since 1990.
According to a poll released today by research group Adimark GfK, Pinera’s support was 27 percent in August, the lowest level in his 18 months in office. The poll of 1,112 people, with a margin of error of 3 percentage points, showed 76 percent of Chileans support the students’ demands, Adimark said on its website.
The drop in support comes even after the economy expanded 8.4 percent in the first half of the year, the fastest pace in 16 years, and is expected to expand 6.6 percent over the year, 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.