On April 30, Sebastián Piñera called a meeting to agree on a common minimum agenda with the presidents of the Senate, Yasna Provoste, and the presidents of the Chamber, Diego Paulsen. The objective? Find meeting points between the opposition and the ruling party to help the families and companies most affected by the economic impact caused by Covid-19.
On May 12, the opposition delivered its proposal of common minimums, while just last Monday Chile Vamos did the same. Thus, with both proposals on the table, the President announced this Wednesday night the axes that the bills will have to alleviate the effects of the crisis.
What was announced is divided into two main axes and in general lines it is more similar to what the government parliamentarians presented. The first has to do with helping families. At this point, the President announced that the Emergency Family Income (IFE) will be extended to all families that are in the Social Household Registry and that do not belong to the 10% of the population with the highest income.
The amount of this new Universal IFE will be equivalent to the poverty line, which means that a one-person household will receive a contribution of $ 177,000, while a four-person household will receive one $ 467,000 and a 10-person household will receive a contribution of $ 467,000. of $ 887 thousand pesos. This measure will run through June, July and August.
The opposition’s Basic Universal Income, on the other hand, sets an amount also equivalent to the poverty line, but with an extra 30%, so the contribution is $ 229,061 for a one-person household and goes up to $ 604,495 for a household with four members. In addition, unlike what was announced by the Executive, the extension of said plan is for four months.
A) Yes, While the monthly cost of the government’s IFE is US $ 2,890 million and US $ 8,670 million in total, that of the opposition is US $ 3,650 million per month and US $ 14,600 million, respectively.
President Piñera emphasized in his announcement that “with these contributions from the State, no family will be under the poverty line, because this Universal IFE covers that requirement and this Emergency Income is added other contributions or subsidies from the State and the income generated by the own families ”.
According to the government, this new IFE will reach more than 14.8 million people and about 7 million households. “Only households with income per person over $ 800 thousand, which for a family of 4 means more than 3.2 million liquid pesos per month, will not receive this benefit,” said the President.
The other central axis is relief and support measures for small and medium-sized enterprises. In this ambit, the government raised its initial offer to create a $ 1 billion fund to a $ 2 billion fund, while the one proposed by the opposition is $ 3 billion.
In the breakdown, it was said that a bonus of $ 1 million will be delivered for each SME with sales of less than 25 thousand UF per year. Additionally, these same people and SMEs will receive a second bonus, in addition to the previous one, equivalent to 3 months of VAT in 2019, with a ceiling of two million pesos. The universe of beneficiaries is of the order of 300 thousand small companies.
Likewise, SMEs that have workers suspended according to the Employment Protection Law, will receive a special subsidy to pay the pension contributions of suspended workers, for a period of four months.
More about Common Minima
–
“We know that the pandemic and the recession have hit women the hardest. For this reason, women in this situation will receive an additional bonus equivalent to 20% of the aforementioned bonuses, ”said Piñera.
For SMEs, a series of tax measures were also announced to alleviate the burden. Among them is the temporary decrease in the criminal interest rate, from 1.5% to 0% per month for each month or fraction of a month due to late payment of all types of taxes and contributions, which will be in force for the money orders issued until December 31, 2021.
Likewise, a refund of the tax credit will be made for companies that maintain an accumulated balance as of May 2021 and that present a decrease of at least 20% of their income. And the remaining tax credit incurred in the acquisition of goods or use of services between January 1 and April 30, 2021 will be reimbursed. The cost: the tax measures will reduce tax collection by US $ 120 million.
Piñer also said that, in the coming days, “we will announce a Health Fund to finance the fight against coronavirus and reduce waiting lists. We will also present a set of tax and administrative measures to help finance all these initiatives ”.
At the end of his presentation, he called on Congress to analyze and approve these “bills that mean urgent and necessary help and relief to families and SMEs in our country.” And for this reason he stressed that “we have entered the necessary bills in Congress today with the utmost urgency.”
In sum, the fiscal cost of the government plan reaches US $ 10,790 million, while that of the opposition amounts to US $ 17,600 million, with a difference between the two of US $ 6,810 million.
Although the announcement was scheduled to be made early this Wednesday, some details, especially in relation to SMEs, delayed the discussion between the government and the parliamentarians of Chile Vamos, who wanted a greater contribution for these companies, in line with what they proposed.
At 7:00 p.m. the heads of the bancada and presidents of the parties of the ruling bloc arrived and at 7:30 p.m. the representatives of small and medium-sized companies. It was at that meeting that the announcement ended, accepting a large part of the measures that that block had delivered.
From the opposition, the president of the Senate, Yasna Provoste (DC), called President Piñera minutes before the announcement. As indicated by the legislator, the reason was to tell her to accept the proposal presented by the center-left, since it was closer to the needs that families are going through.
The debate will now move to Congress.
–
