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Chile Won't Achieve Goal Of Balancing Budget By 2018, FM Says

by Mike Godfrey, Tax-News.com, Washington

06 October 2015


Chile's Minister of Finance, Rodrigo Valdés, said on October 1, 2015, that the Government will not be able to realize its goal of balancing the budget by 2018.

The Minister said in his 2016 budget presentation that the country's current macroeconomic situation has forced the Government to abandon the 2018 target. He said that the task of balancing the budget will fall in part to the next administration.

The Government aims to cut the structural deficit by a quarter of a percentage point of gross domestic product (GDP) each year, Valdés said.

The Minister did not say whether the Government will stick to its plan to raise tax revenue by three percent of GDP by 2018. However, he did note that other governments have been forced to change their tax strategies when macroeconomic conditions have changed.

Last year Chile approved a tax reform designed to raise tax revenue by USD8.2bn annually through measures such as a hike in the corporate tax rate in order to provide free education for all, and to fund other social projects.

This year the country's economy has been hit by a steep drop in the price of copper, one of its main exports.

TAGS: Finance | tax | economics | Chile | fiscal policy | gross domestic product (GDP) | budget | corporation tax | education | tax reform

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