|  ElCiudadano.cl |  Noticias

El Ciudadano

Original article: “No hay ninguna garantía”: Quiroz admite que incentivo de la megarreforma no garantiza nuevos empleos

The Minister of Finance, Jorge Quiroz, acknowledged that «there is no guarantee» that the economic-tax mega-reform pushed by the administration of José Kast will ensure new job creation.

During his appearance before the Finance Commission in the Chamber of Deputies on Thursday, the head of the treasury faced criticism from lawmakers regarding measures such as the controversial reduction of the first-category tax from 27% to 23%.

The state secretary was questioned by Deputy Gael Yeomans (FA), who pointed out that the tax credit of up to 83 million pesos does not truly incentivize job creation, as companies are not required to offer more job positions, a point Quiroz admitted was accurate.

«Deputy Yeomans says that employers are not obligated to hire additional workers, meaning there could be companies that receive tax benefits without creating new jobs, and that doesn’t ensure the intended outcome and the answer is that’s correct,” he stated.

«Indeed, there is no guarantee that more people will be hired. What we are doing is providing an incentive, whether to hire or to retain, to avoid layoffs,” the finance minister admitted.

According to Quiroz, the economic-tax mega-reform is an instrument that functions in both directions.

«It applies to existing employment, which is especially significant today given that we have an 8% unemployment rate, which has persisted for over 30 months, and if you look at employment data, you will see that while there are jobs in Chile, there is also significant job loss,» he argued.

He indicated that the goal of the Kast administration is to achieve an unemployment rate of 6.5% within four years.

Tax Benefits for Large Corporations

However, the minister’s explanations were challenged by Deputy Yeomans, who doubted that the measures proposed by the far-right government, such as the reduction of the first-category tax from 27% to 23%, the tax invariability statute for long-term investments (25 years), the elimination of the capital gains tax on securities, and the implementation of a formal employment tax credit, could effectively lead to the creation of new jobs for Chileans.

The legislator warned that in practice, these incentives will likely turn into tax benefits for large corporations.

«Why not just apply, for example, an employment subsidy? That would be a more direct mechanism to guarantee that workers will be hired and that there will be a real increase in employment,» the legislator proposed to the Finance Commission.

Later, in a message posted on her account on social media platform X, the leftist parliamentarian noted that Quiroz admitted that there is absolutely no certainty that the tax gift to large corporations will result in greater employment, describing the situation as truly shameful.

La entrada Finance Minister Quiroz Acknowledges No Assurance That Mega-Reform Will Create Jobs se publicó primero en El Ciudadano.