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Law360 (March 20, 2020, 8:44 PM EDT) -- Chile has said it will suspend corporate income tax payments for three months and halt duties on foreign loans for six months as part of an $11.75 billion government package to bail out businesses hurt by the novel coronavirus pandemic.
President Sebastián Piñera, presenting what analysts called the biggest stimulus package in Chile's history, said Thursday that the sweeping measures would help workers and companies mitigate the impact of the outbreak.
The South American country of 18 million people has recorded 430 cases of COVID-19, the respiratory disease caused by the novel coronavirus, but no deaths as of Friday. On Wednesday, Piñera declared a 90-day state of emergency in the country, allowing him to order a curfew and secure food, among other measures.
"Exceptional moments demand exceptional measures," the president was quoted as saying in a statement. "We are concerned and taking action to alleviate our compatriots who have been affected by the impact of this health crisis and the economic situation."
The stimulus, which is equivalent to 4.7% of Chile's gross domestic product, is feasible "because in the past we have been prudent and accumulated a series of fiscal and financial cushions to face emergencies like that we're experiencing today," the government said.
The package has three main goals: to replenish the budget of the country's public health system, protect the income of families and shield jobs and the companies that create them, the statement said.
Along with the hiatus on corporate income tax payments, the government will stop charging its stamp duty on foreign-source financial transactions for credit operations for half a year.
Other tax measures include delaying value-added tax and property tax payments for companies with annual revenue of up to 10 billion Chilean pesos ($11.6 million).
For the approximately 500,000 businesses with annual sales of less than 2.1 billion pesos, the government will also delay the deadline for filing tax returns from April to May and postpone payments of taxes owed until July.
The Chilean tax authority Wednesday said it was delaying the deadline for filling annual income returns by a week, to March 27 from March 19.
Piñera said the plan, which is subject to a vote by the Chilean Congress, also involves resources to help small and medium-sized enterprises cope with the pandemic's impact. He described a new $500 million state bank capitalization plan to provide more private bank loans and expanded state loan guarantees.
The government also announced a "COVID-19 Law" that will guarantee payment of wages from the state's unemployment insurance fund for workers who must remain at home without the possibility of working remotely.
Chile's presidential administration didn't respond to a request for comment.
--Editing by Neil Cohen.
Update: This story has been updated to reflect a request for comment from the Chilean government.
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