Government passes law to temporarily lower fuel tax

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SANTIAGO.-  A law establishing a temporary reduction on the gasoline excise tax was published by the government today in the “Diario Oficial”.   The law also includes changes to the tax benefits for construction projects concerning VAT payments.

While the fuel tax used to be 6 UTM per cubic meter (equivalent to 208 pesos per liter), starting today, the tax will be lowered to 4.5 UTM per cubic liter (156 pesos per liter) – meaning a one-time tax cut of 52 pesos per liter.

Along with the controversial price cut, it was finally decided that homes being constructed with a value of up to 3,000 UF will continue to enjoy tax-exemption benefits.

The law also calls for an elimination of the Stamp Tax (Impuesto de Timbres y Estampillas) for small and medium-sized businesses.

Additionally, the statute indicates that owners of hybrid vehicles registered between March 2008 and March of 2010 will be reimbursed for the cost of traffic permits for four years.