Editing Economy of Chile (section)

===Fiscal policy===

One of Chile's fiscal policy central features has been its counter-cyclical nature. This has been facilitated by the voluntary application since 2001 of a structural balance policy based on the commitment to an announced goal of a medium-term structural balance as a percentage of GDP. The structural balance nets out the effect of the economic cycle (including copper price volatility) on fiscal revenues and constrains expenditures to a correspondingly consistent level. In practice, this means that expenditures rise when activity is low and decrease in booms<ref name="oecd2007">[http://www.oecd.org/chile/43411879.pdf Rodríguez, J., C. Tokman and A. Vega (2007). "Structural balance policy in Chile".] OECD Journal on Budgeting 7(2), pp. 59–92.</ref> The target was of 1% of GDP between 2001 and 2007, it was reduced to 0.5% in 2008 and then to 0% in 2009 in the wake of the [[2008 financial crisis]].<ref name="corbo2005">[http://www.elmercurio.com/blogs/2013/08/25/14699/La-politica-fiscal-chilena.aspx Corbo, Vittorio. La política fiscal chilena.] Blogs from El Mercurio Newspaper. 25 August 2013.</ref> In 2005, key elements of this voluntary policy were incorporated into legislation through the Fiscal Responsibility Law (Law 20,128).<ref name="oecd2007"/>

The Fiscal Responsibility Law also allowed for the creation of two [[sovereign wealth funds]]: the Pension Reserve Fund (PRF), to face increased expected old-age benefits liabilities, and the Economic and Social Stabilization Fund (ESSF), to stabilize fiscal spending by providing funds to finance fiscal deficits and debt amortization.<ref name="oecd2007" /><ref name="swf">{{cite web|url=http://www.hacienda.cl/english/sovereign-wealth-funds/about-the-funds.html|title=About the Funds|author=Ministry of Finance|access-date=11 June 2015|archive-date=13 June 2015|archive-url=https://web.archive.org/web/20150613015855/http://www.hacienda.cl/english/sovereign-wealth-funds/about-the-funds.html|url-status=dead}}</ref> By the end of 2012, they had respective market values of US$5.883&nbsp;million and US$14.998&nbsp;million.<ref name="swf2012">{{cite web|url=http://www.hacienda.cl/fondos-soberanos/informe-anual.html|title=Informe Anual|author=Ministerio de Hacienda|access-date=11 June 2015|archive-date=13 June 2015|archive-url=https://web.archive.org/web/20150613033632/http://www.hacienda.cl/fondos-soberanos/informe-anual.html|url-status=dead}}</ref>

The main taxes in Chile in terms of revenue collection are the value added tax (45.8% of total revenues in 2012) and the income tax (41.8% of total revenues in 2012).<ref>{{cite web|url=http://www.sii.cl/aprenda_sobre_impuestos/estudios/estadistribu/ingresos_tributarios_new.htm|title=Ingresos Tributarios Anuales|access-date=11 June 2015}}</ref> The value added tax is levied on sales of goods and services (including imports) at a rate of 19%, with a few exemptions. The income tax revenue comprises different taxes. While there is a corporate income tax of 20% over profits from companies (called First Category Tax), the system is ultimately designed to tax individuals. Therefore, corporate income taxes paid constitute a credit towards two personal income taxes: the Global Complementary Tax (in the case of residents) or the Additional Tax (in the case of non-residents). The Global Complementary Tax is payable by those that have different sources of income, while those receiving income solely from dependent work are subject to the Second Category Tax. Both taxes are equally progressive in statutory terms, with a top marginal rate of 40%. Income arising from corporate activity under the Global Complementary Tax only becomes payable when effectively distributed to the individual. There are also special sales taxes on alcohol and luxury goods, as well as specific taxes on tobacco and fuel. Other taxes include the inheritance tax and custom duties.<ref>{{cite web|url=http://www.sii.cl/portales/inversionistas/imp_chile/imp_chile_ing.htm|title=Information for Foreign Investors|access-date=11 June 2015|url-status=dead|archive-url=https://web.archive.org/web/20150226180228/http://www.sii.cl/portales/inversionistas/imp_chile/imp_chile_ing.htm|archive-date=26 February 2015}}</ref>

In 2012, general government expenditure reached 21.5% of GDP, while revenues were equivalent to 22% of GDP.<ref name="survey">[http://dx.doi.prg/10.1787/eco_surveys-chl-2013-en OECD (2013), OECD Economic Surveys: Chile 2013.]{{dead link|date=September 2017 |bot=InternetArchiveBot |fix-attempted=yes }} OECD Publishing.</ref> Gross financial debt amounted to 12.2% of GDP, while in net terms it was −6.9% of GDP, both well below OECD averages.<ref name="survey" />