Chile's Congress Advances President Kast's Economic Reform Agenda

WHO:

AP News - President José Antonio Kast is the leader promoting the economic overhaul.

AP News - Finance Minister Jorge Quiroz supports the reform.

AP News - Constanza Martínez, president of the left-wing Broad Front coalition, criticizes the legislation.

WHAT:

ABC News Business - Chile’s Congress has approved most of a major tax and economic overhaul.

AP News - The legislation aims to revive Chile’s private sector, drive job creation, and eliminate the fiscal deficit.

AP News - The corporate tax rate for large companies will be gradually reduced from 27% to 23%.

AP News - Newly built homes will be exempt from the country’s value-added tax.

AP News - The bill allows private companies to seek compensation for delays in investment projects due to environmental disputes.

AP News - Lawmakers approved every change to the bill except one regarding municipal compensation for tax breaks.

WHERE:

AP News - The legislative actions took place in Santiago, Chile.

AP News - President Kast spoke to reporters in the northern city of Copiapó.

WHEN:

AP News - The vote occurred on a Tuesday, with Kast taking office just over three months prior.

AP News - The economy shrank 0.5% in the first quarter of 2026.

AP News - Unemployment rose to 9.4% in the March-May period of 2026.

WHY:

AP News - The reforms are intended to stimulate growth in Chile’s sluggish economy.

AP News - Kast's election marked a significant shift to the right in Chilean politics, aiming to return to market-oriented economic policies.

HOW:

AP News - The Congress approved the economic overhaul through a legislative vote, with modifications made by the Senate before returning to the lower house for final approval.

(UPDATED July 22, 2026 14:45 UTC)

Chile’s Congress has approved a significant tax and economic overhaul aimed at reviving the private sector, driving job creation, and eliminating the fiscal deficit, with President José Antonio Kast and Finance Minister Jorge Quiroz leading the charge. The legislation includes a gradual reduction of the corporate tax rate for large companies from 27% to 23% and exempts newly built homes from the value-added tax, while also allowing private companies to seek compensation for delays in investment projects due to environmental disputes. However, the left-wing Broad Front coalition, led by Constanza Martínez, has criticized the reforms, which come as the economy faces challenges, including a 0.5% contraction in the first quarter and an unemployment rate of 9.4% during the March to May period.