By Natalia A Ramos Miranda
(Reuters) – The Chilean government on Monday unveiled a plan to spur investment through 2023, including a raft of tax breaks for the world’s largest copper-producing nation at a time when its economy is faltering.
In a press conference alongside President Gabriel Boric, Finance Minister Mario Marcel said the package aims to boost investment by at least five percentage points in 2023.
“This ‘Invest in Chile’ plan brings together management efforts, public resources and regulatory changes, all of which can be implemented quickly,” said Marcel. “This leads us to believe that we can see most of its impact in 2023.”
The plan includes public investment, better access to finance and encourages private investment through tax benefits. These include a $500 million tax credit fund for green businesses that have a “high multiplier effect,” an extension of a reduced tax rate for small businesses, and immediate write-off mechanisms for all of 2023.
New copper mining projects will also be exempted for five years from an ad valorem component proposed in a new mining royalty. That would have levied a tax on the value of a mine’s output.
The government also plans to reopen foreign investment offices in Europe and North America and establish public-private working groups in sectors such as construction, energy, transport and mining.
That includes better coordination of public safety, something the mining industry has asked the government to do after reporting a surge in violence that has disrupted operations in northern Chile.
Last week, the central bank said it expects investment to fall 3.3% this year and 4.7% in 2023.
In its latest monetary policy report, the bank said the economy will grow this year but will face a more complex scenario of a contraction of between 1.5% and 0.5% in 2023.
(Reporting by Natalia Ramos, edited by Fabián Cambero; writing by Alexander Villegas; editing by Bill Berkrot)
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