Chile’s Lower House Backs Kast’s Economic Bill, but a Fight Looms

Chile · Economic Reform

A month after President Jose Antonio Kast filed his flagship economic package, it has cleared its first real vote in a Congress he does not control. The win is genuine but narrow, and the toughest battles are still ahead: a clause-by-clause fight in which the bill’s signature tax-stability guarantee is already wobbling. For investors watching Chile’s pivot, the next weeks matter more than the headline.

What did the Chile economic bill clear?

The Rio Times, the Latin American financial news outlet, reports that the Chile economic bill, the government’s National Reconstruction and economic-reactivation package, was approved in general by the lower house with 90 votes in favor. The support came from the governing coalition and the PDG party, while the opposition voted mostly against, allowing the initiative to advance to its detailed stage.

That stage is the harder one. The bill now moves to an article-by-article vote covering more than 40 articles and 119 proposed amendments, a phase the executive expects to be even more complex. The session that delivered the general approval was marked by intense last-minute negotiations to lock in support.

What is in the package?

A broad pro-investment agenda. Its centerpiece is a cut in the corporate tax rate from 27% to 23%, alongside a tax credit for hiring workers near the minimum wage and the elimination of property tax for senior citizens. The bill is the legislative form of the package Kast filed in April to lift growth and investment.

Several measures are contentious. The agenda includes a job-training tax break, an exception to copyright for large-scale data analysis used in artificial intelligence, and the tax-stability guarantee. Some of these had already suffered setbacks in committee, signaling the rough path ahead in the detailed vote.

Why is the tax-stability clause wobbling?

Because it splits both sides. The clause would fix a stable tax regime for 25 years for investments over $50 million, a tool meant to attract large projects. But it has detractors in the opposition and is not well regarded by some governing-coalition lawmakers either, which is why finance, interior and government-relations ministers intervened to shore up support.

Negotiations to save it stalled. The Christian Democrats had floated cutting the guarantee from 25 to 20, or even 15, years, and the government showed willingness to compromise, but the party ultimately rejected the deal. The finance ministry had already removed VAT and a 35% top rate from the clause in response to earlier objections.

How are the two sides framing it?

The government sees a reactivation imperative. Kast’s administration argues the package is needed to revive investment and growth after years of sluggish expansion, and treats the corporate tax cut and stability guarantee as signals to investors that Chile is open for large projects. The general approval is its first major legislative win on the agenda.

Critics warn against winning by a single vote. One lawmaker argued that what the country and investors want is stability and broad agreements, not a clause passed by the narrowest margin, cautioning that a one-vote win will not unleash investment. Others have raised the prospect of a Constitutional Tribunal challenge, which could delay or reshape the bill.

What should investors and analysts watch next?

• The tax-stability vote: whether the 25-year guarantee survives, shrinks or falls is the bill’s defining test for investors.
• The corporate tax cut: the move from 27% to 23% is the headline pro-investment measure to track through the detailed vote.
• The 119 amendments: how the article-by-article phase reshapes the package will determine its real economic weight.
• A Constitutional Tribunal challenge: any opposition move to the court could delay or alter the final law.
• The Senate stage: after the lower house, the Senate, where opposition has hardened, is the next battleground.

Frequently Asked Questions

What is the Chile economic bill?

It is President Kast’s National Reconstruction and economic-reactivation package, which the lower house approved in general with 90 votes. It cuts corporate tax from 27% to 23%, offers a hiring tax credit, ends property tax for seniors, and includes a contested 25-year tax-stability guarantee.

What is the tax-stability guarantee?

It is a clause fixing a stable tax regime for 25 years for investments over $50 million, intended to attract large projects. It is the bill’s most contested element, opposed by parts of both the opposition and the governing coalition, and negotiations to shorten it have so far failed.

What happens next?

The bill moves to an article-by-article vote on more than 40 articles and 119 amendments, a phase expected to be tougher than the general approval. After the lower house, it goes to the Senate, where opposition has hardened, and a Constitutional Tribunal challenge remains possible.

How big is the corporate tax cut?

The package would reduce Chile’s corporate tax rate from 27% to 23%, a core pro-investment measure aimed at reviving growth. It is part of the broader reform Kast filed in April, which targets higher growth and lower unemployment over the rest of the decade.

Why do critics oppose the clause?

Critics argue a 25-year guarantee is too long and passing it by a single vote would not deliver the broad political consensus investors actually want. Some prefer a shorter term and higher investment threshold, while others have raised constitutional objections that could end up before the Constitutional Tribunal.

Connected Coverage

The bill’s origins are detailed in our reporting on how Kast filed his 40-plus measure reform package in April. The growth backdrop is covered in our guide to Chile’s economy in 2026, and the political climate in our piece on the strain on Kast’s approval rating.

Reported by Sofia Gabriela Martinez for The Rio Times — Latin American financial news. Filed May 20, 2026 — 19:30 BRT.