“We hope that the government sponsors the initiative and that they make changes to it if they deem it convenient.” The deputy Jaime Naranjo (PS), president of the Finance Commission of the Lower House, confirmed the entry next Tuesday of an indication to the tax reform project -approved in general- and that seeks to compensate for the decrease in revenue that the proposal has suffered original from the Government and which aimed to collect more than 4% of GDP.
This is the Tax on Financial Transactions –or “Robin Hood” Tax–, which is progressive in nature and whose tax burden falls mainly on high-net-worth taxpayers. The initiative, whose model is currently applied in 32 countries –such as Germany, France, South Africa, China, Japan and Brazil–, in the Chilean case seeks to raise around 2,900 million dollars a year. The proposal is known and valued by the Minister of Finance, Mario Marcel, and from the parliamentary instance chaired by Deputy Naranjo they hope to have the sponsorship of the Executive to achieve its inclusion in the tax reform.
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“We hope that the tax that we propose will become the true heart of the tax reform,” the socialist legislator told The counter, confirming that the indication will be incorporated this Tuesday, October 11, “waiting for the Government to say that it will sponsor it.”
In this sense, deputy Naranjo announced that “we continue with our offensive, we talked with authorities from the Ministry of Finance, and we are requesting an interview with the President of the Republic, to explain the proposal and that he be aware of what we propose, beyond that we have excellent relations with Minister Marcel Marcel, who we hope will also talk with President Gabriel Boric”.
Regarding the position of his peers from the opposition, who were against the general vote on the tax reform —without reducing their progress, but leaving room for doubt—, Deputy Naranjo stated that he delivered a folder to each right-wing deputy with all the background to clear up the uncertainty and assured that “until now none has said no, but rather all have stated that they are studying it”.
“I have not felt any a priori rejection of our proposal by the right-wing deputies. On the contrary, I have seen interest in studying the matter and everyone welcomed the dossier on the indication in a very positive way,” said Jaime Naranjo, emphasizing that despite that it be declared inadmissible “will remain in the history of the law that we presented it.”
In any case, the pro-government deputy reiterated that it will finally be a decision that President Boric will take and “that is why we are encouraged that he knows our vision directly.”
“Our proposal has international experience, it is not something crazy, and it is not something that we are inventing. And the international experience indicates that it is very effective for collection, contributes to giving greater stability to the economy and does not put investment or growth. It only regulates a market that today is not completely regulated”, explained deputy Naranjo finally.
The economist Gonzalo Martner described the so-called “Robin Hood” tax as “a typical case of a tax that originates to finance social activities with a small rate that is applied to international financial transactions.”
He clarified that it is very different from income tax and that it has nothing to do with people’s income or with wealth tax. “It is a tax on transactions, conceptually, not on income or wealth,” he stressed.
The academic from the University of Santiago affirmed that the substance of the matter is that it is a progressive tax and that it is paid by those who buy and sell shares. “It is self-focused and the estimates figures are very convincing,” Martner told this outlet, noting that the tax is “very efficient with collection because it is applied to a small universe of transactions, which in turn are regulated.”
“It is very rare that there are informal share transactions, therefore it is a tax that is easy to collect,” said the former socialist militant, flatly ruling out that it is a disincentive to carry out such transactions.
Regarding the support of the Government towards the indication, the economist specified that by legal system no tax can be established without the sponsorship of the Executive and in that sense the support of La Moneda will be fundamental. Martner assured that it will be “a difficult tax for right-wing parliamentarians to reject.”
In the opinion of the academic from Usach, the “Robin Hood” tax is positive to complement the tax reform and “raise a considerable amount of resources.”
Now, “it depends on what the government decides,” remarked the economist Gonzalo Martner, reiterating that in his opinion “there are collection and concentration arguments” for it to be approved.
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Tax “Robin Hood” seeks to have government sponsorship before Tuesday to enter the Finance Commission of the Lower House
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