Ministry of Finance (Chile) facts for kids

Mario Marcel, the current Minister of Finance.

The Ministry of Finance of Chile (Spanish: Ministerio de Hacienda) is the cabinet-level administrative office in charge of managing the financial affairs, fiscal policy, and capital markets of Chile; planning, directing, coordinating, executing, controlling and informing all financial policies formulated by the President of Chile.

Since March 2022, the Minister of Finance is Mario Marcel.

History

In 1814 the Secretary of Finance was created, as Supreme Director Bernardo O'Higgins sought to develop an administrative framework for the then newly formed nation, considering the need to ascertain its independence from the Spanish crown. The office was first organized by a Presidential Decree on 2 June 1817, and was named "Secretariat of Finance" (1818 - 1824). Hipólito de Villegas was appointed to lead the new institution. The present structure, duties and attributions were defined by Presidential Decree N° 7912, "General Law of Ministries", on 30 November 1927.

Institutional framework

According to Article 6 of Decree 7,912 of 1927, the Ministry of Finance responsibilities include, among others:

• Management of State's financial policy
• Collection and administration of public revenue
• Public accounting
• Study of custom policy and intervention in trade agreements
• Issues concerning monetary laws, banks and credit institutions
• Issues concerning corporation oversight, stock exchange and insurance
• Everything related to public credit and the presentation in Congress of projects affecting public finance
• The development and technical study of the Budget of the Nation and investment account

In practice, the Ministry of Finance executes policies through several related and dependent institutions.

Related Institutions:

• BancoEstado
• Government Procurement Directorate
• Civil Service Directorate
• National Customs Service
• Internal Tax Service
• Public Purchasing and Recruiting Department
• Superintendency of Banks and Financial Institutions
• Superintendency of Securities and Insurance
• Superintendency of Game Casinos
• Financial Analysis Unit

Dependent Institutions:

• Budget Office
• General Treasury of the Republic

Policies

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 economic activity is low and decrease in booms. 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 global financial crisis In 2005, key elements of this voluntary policy were incorporated into legislation through the Fiscal Responsibility Law (Law 20,128).

However, the financial crisis of 2008 together with the reconstruction following the 2010 Chile earthquake undermined the financial position of the country, resulting in a structural deficit that was reduced to 1/2 percent of GDP in 2012, two years ahead of government expectations to pass the 1% threshold. The 2013 budget was devised with a target structural deficit of 1%.

The Fiscal Responsibility Law also allowed for the creation of two sovereign wealth funds: the Pension Reserve Fund (PRF) and the Economic and Social Stabilization Fund (ESSF). The PRF was created as a response to the expected increase in liabilities related to old-age pensions and benefits, especially for the poor, and it had accumulated US$5.883 million (market value) by the end of 2012. The PRF is set to receive yearly capital injections between 0.2% and 0.5% of the previous year's GDP depending on the fiscal surplus, so new resources are secured every year. The ESSF's objective is to stabilize fiscal spending by providing funds to finance fiscal deficits and debt amortization and had market value of US$14.998 million by the end of year 2012. Each year, the ESSF accumulates any fiscal surplus remaining after the contributions to the FRP and to the capital of the Central Bank of Chile, excluding debt service and anticipatory contributions during the previous year. The funds are managed by the Central Bank of Chile and a Financial Committee advises on their investment policy. Chile also participated in the discussion and agreed to the Santiago Principles.

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). 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.

In 2012, general government expenditure reached 21.5% of GDP, while revenues were equivalent to 22% of GDP. Gross financial debt amounted to 12.2% of GDP, while in net terms it was of -6.9% of GDP, both well below OECD averages.

Chile's prudent fiscal policy along with low debt levels have been cited as contributing factors to Chile's exceptionally high credit rating in the context of the region. Chile's AA− S&P rating is the highest in the Latin America, while Fitch Ratings places the country one step below, in A+.

List of ministers of finance

Patria Vieja period

Picture	Name	Entered office	Exited office	Notes	Appointed by
	José María Villareal	14 March 1814	23 July 1814	Secretary of Government	Francisco de la Lastra
	Bernardo de Vera y Pintado	23 July 1814	10 August 1814	Secretary of Government and Finance	Government Junta
	Manuel Rodríguez Erdoyza	10 August 1814	2 October 1814	Secretary of Government and Finance

Ministers of finance

Picture	Name	Entered office	Exited office	Notes	Appointed by
	Hipólito de Villegas y Fernández	7 September 1817	30 March 1818		Bernardo O'Higgins
	Anselmo de la Cruz y Bahamonde	30 March 1818	14 April 1818
	José Miguel Infante y Rojas	14 April 1818	27 June 1818
	Anselmo de la Cruz y Bahamonde	27 June 1818	2 May 1820
	José Antonio Rodríguez Aldea	2 May 1820	28 January 1823
	Agustín Vial Santelices	28 January 1823	8 April 1823		Government Junta
	Pedro Nolasco Mena y Ramírez Rivilla	8 April 1823	12 July 1823		Ramón Freire
	Diego José Benavente Bustamante	12 July 1823	22 February 1825
	José Ignacio Eyzaguirre Arechavala	22 February 1825	18 June 1825
	Rafael Correa de Saa Lazón	18 June 1825	8 October 1825
	Diego José Benavente Bustamante	8 October 1825	17 October 1825
	Manuel José Gandarillas Guzmán	17 October 1825	9 September 1826
	Agustín Vial Santelices	12 September 1826	20 October 1826		Agustín Eyzaguirre
	Melchor de Santiago Concha y Cerda	20 October 1826	22 October 1826
	Ventura Blanco Encalada	8 March 1827	23 July 1828	Reappointed	Ramón Freire
	Francisco Ruiz-Tagle Portales	23 July 1828	16 July 1829		Francisco Antonio Pinto
	Manuel José Huici	16 July 1829	9 November 1829		Francisco Ramón Vicuña
	Pedro José Prado Montaner	9 November 1829	7 December 1829
	Mariano Egaña Fabres	20 February 1830	18 March 1830		Francisco Ruiz-Tagle
	Juan Francisco Meneses Echanes	18 March 1830	15 June 1830
	Manuel Rengifo Cárdenas	15 June 1830	9 November 1835		José Tomás Ovalle
	Joaquín Tocornal Jiménez	9 November 1835	14 April 1841		José Joaquín Prieto
	Rafael Correa de Saa Lazón	14 April 1841	18 September 1841
	Manuel Rengifo Cárdenas	18 September 1841	10 April 1845		Manuel Bulnes
	José Joaquín Pérez Mascayano	10 April 1845	22 September 1846
	Manuel Camilo Vial Formas	22 September 1846	9 May 1848	Interim
	Salvador Sanfuentes Torres	9 May 1848	12 June 1849	Interim
	Antonio García Reyes	12 June 1849	19 April 1850
	Jerónimo Urmeneta García-Abello	19 April 1850	7 May 1852	Appointed by
				Reappointed by	Manuel Montt
	José Guillermo Waddington Urrutia	7 May 1852	7 January 1854
	José María Berganza Lorca	7 January 1854	18 September 1856	Interim
	José Francisco Gana López	18 September 1856	31 October 1856	Interim
	Alejandro Vial Guzmán	31 October 1856	29 September 1857
	Francisco de Borja Solar Gorostiaga	29 September 1857	8 January 1858
	Matías Ovalle Errázuriz	8 January 1858	3 October 1859
	Jovino Novoa Vidal	3 October 1859	1 October 1861
	Manuel Rengifo Vial	1 October 1861	9 July 1862		José Joaquín Pérez
	José Victorino Lastarria Santander	9 July 1862	16 January 1863
	Domingo Santa María González	16 January 1863	10 May 1864
	Alejandro Reyes Cotapos	10 May 1864	7 January 1869
	Melchor de Concha y Toro	7 January 1869	2 August 1870
	José Antonio Gandarillas Luco	2 August 1870	18 September 1871
	Camilo Cobo Gutiérrez	18 September 1871	12 April 1872		Federico Errázuriz Zañartu
	Ramón Barros Luco	12 April 1872	18 September 1876
	Rafael Sotomayor Baeza	18 September 1876	27 October 1877		Aníbal Pinto
	Augusto Matte Pérez	27 October 1877	5 August 1878
	Julio Zegers Samaniego	5 August 1878	17 April 1879
	Augusto Matte Pérez	17 April 1879	16 June 1880
	José Alfonso Cavada	16 June 1880	18 September 1881
	Luis Aldunate Carrera	18 September 1881	25 April 1882		Domingo Santa María
	Pedro Lucio Cuadra Luque	25 April 1882	18 January 1884
	Ramón Barros Luco	18 January 1884	5 September 1885
	Pedro Nolasco Gandarillas Luco	5 September 1885	13 October 1885
	Hermógenes Pérez de Arce Lopetegui	13 October 1885	18 September 1886
	Agustín Edwards Ross	18 September 1886	13 April 1888		José Manuel Balmaceda
	Enrique Salvador Sanfuentes Andonaegui	13 April 1888	2 November 1888
	Justiniano Sotomayor Guzmán	2 November 1888	11 June 1889
	Juan de Dios Vial Guzmán	11 June 1889	23 October 1889
	Pedro Montt Montt	23 October 1889	21 January 1890
	Pedro Nolasco Gandarillas Luco	21 January 1890	7 August 1890
	Manuel Salustio Fernández Pradel	7 August 1890	15 October 1890
	Lauro Barros Valdés	15 October 1890	26 December 1890
	Anfión Muñoz Muñoz	26 December 1890	5 January 1891
	Ismael Pérez Montt	27 December 1890	5 January 1891	Interim
	José Miguel Valdés Carrera	5 January 1891	29 March 1891
	Manuel Arístides Zañartu Zañartu	29 March 1891	29 July 1891
	Manuel José Yrarrázaval Larraín	29 July 1891	29 August 1891
	Joaquín Walker Martínez	7 September 1891	26 December 1891		Revolutionary Junta of Iquique
	Francisco Valdes Vergara	26 December 1891	14 March 1892		Jorge Montt
	Agustin Edwards Ross	14 March 1892	9 July 1892
	Enrique Mac Iver	9 July 1892	22 April 1893
	Alejandro Vial Guzmán	22 April 1893	26 April 1894
	Carlos Riesco Errázuriz	26 April 1894	7 December 1894
	Manuel Salustio Fernández	7 December 1894	1 August 1895
	Enrique Mac Iver	1 August 1895	24 November 1895
	Hermógenes Pérez de Arce Lopetegui	24 November 1895	18 September 1896
	José Francisco Fabres	18 September 1896	20 November 1896		Federico Errázuriz Echaurren
	Justiniano Sotomayor Guzmán	20 November 1896	26 June 1897
	Juan Enrique Tocornal	26 June 1897	25 August 1897
	Elías Fernández Albano	25 August 1897	23 December 1897
	Alberto González Errázuriz	23 December 1897	14 April 1898
	Darío Zañartu del Río	14 April 1898	28 June 1898
	Rafael Sotomayor Gaete	28 June 1898	27 June 1899
	Manuel Salinas González	27 June 1899	14 October 1900
	Ramón Santelices Cuevas	14 October 1900	3 November 1900
	Nicolás González Errázuriz	3 November 1900	15 March 1901
	Manuel Fernández García	15 March 1901	1 May 1901
	Juan Luis Sanfuentes Andonaegui	1 May 1901	3 October 1901
	Luis Barros Borgoño	3 October 1901	18 November 1901		Germán Riesco
	Enrique Villegas Encalada	18 November 1901	6 May 1902
	Guillermo Barros Jara	6 May 1902	20 November 1902
	Ricardo Cruzat Hurtado	20 November 1902	7 April 1903
	Manuel Salinas González	7 April 1903	1 September 1903
	Miguel Cruchaga Tocornal	1 September 1903	10 January 1904
	Ramón Santelices Cuevas	10 January 1904	12 April 1904
	Guillermo Barros Jara	12 April 1904	12 May 1904
	Maximiliano Ibáñez	12 May 1904	30 October 1904
	Ernesto Hübner Bermúdez	30 October 1904	18 March 1905
	Antonio Subercaseaux Pérez	18 March 1905	21 October 1905
	Belfor Fernández	21 October 1905	19 March 1906
	Ramón Santelices Cuevas	19 March 1906	7 May 1906
	Joaquín Prieto Hurtado	7 May 1906	18 September 1906
	José Raimundo del Río Soto Aguilar	18 September 1906	29 October 1906		Pedro Montt
	Rafael Sotomayor Gaete	29 October 1906	12 June 1907
	Ramón Subercaseaux Pérez	12 June 1907	25 October 1907
	Enrique A. Rodríguez	25 October 1907	29 August 1908
	Pedro Nicolás Montenegro Onel	29 August 1908	22 January 1909
	Luis Devoto A.	22 January 1909	15 June 1909
	Joaquín Figueroa Larraín	15 June 1909	15 September 1909
	Manuel Salinas González	15 September 1909	25 June 1910
	Carlos Balmaceda Saavedra	25 June 1910	23 December 1910
	José Raimundo del Río Soto Aguilar	23 December 1910	11 January 1911		Ramón Barros Luco
	Roberto Sánchez García de la Huerta	11 April 1911	15 August 1911
	Pedro Nicolás Montenegro Onel	15 August 1911	20 May 1912
	Samuel Claro Lastarria	20 May 1912	8 August 1912
	Manuel Rivas Vicuña	8 August 1912	8 April 1913
	Pedro García de la Huerta Izquierdo	8 August 1913	16 June 1913
	Arturo Alessandri Palma	16 June 1913	17 November 1913
	Ricardo Salas Edwards	17 November 1913	3 September 1914
	Alfredo Barros Errázuriz	3 September 1914	6 September 1914
	Enrique Oyarzún Mondaca	6 September 1914	15 September 1914
	Alberto Edwards Argandoña	15 September 1914	15 December 1915
	Manuel García de la Huerta	15 December 1915	23 December 1915
	Ramón Santelices Cuevas	23 December 1915	8 January 1916	PC	Juan Luis Sanfuentes
	Armando Quezada Acharán	8 January 1916	1 July 1916	PR
	Luis Devoto Arrizaga	1 July 1916	20 November 1916	PLD
	Arturo Prat Carvajal	20 November 1916	14 July 1917	PN
	Armando Quezada Acharán	14 July 1917	12 October 1917	PR
	Ricardo Salas Edwards	12 October 1917	18 January 1918	PC
	Manuel Hederra Concha	18 January 1918	27 April 1918	PN
	Luis Claro Solar	27 April 1918	6 September 1918	PL
	Luis Aníbal Barrios	6 September 1918	25 November 1918	PR
	Luis Claro Solar	25 November 1918	9 July 1919	PL
	Julio Philippi Bihl	9 July 1919	8 November 1919
	Ramón Subercaseaux Pérez	8 November 1919	26 March 1920	PNa
	Enrique Oyarzún Mondaca	26 March 1920	16 June 1920	PR
	Antonio Viera Gallo	16 June 1920	1 July 1920	PN
	Francisco Garcés Gana	1 July 1920	23 December 1920	PL
	Daniel Martner	23 December 1920	12 May 1921	PR	Arturo Alessandri
	Enrique Oyarzún Mondaca	12 May 1921	16 August 1921
	Víctor R. Celis Maturana	16 August 1921	3 November 1921
	Francisco Garcés Gana	3 November 1921	22 March 1922	PL
	Galvarino Gallardo Nieto	22 March 1922	1 April 1922	PR
	Samuel Claro Lastarria	1 April 1922	29 August 1922	PL
	Guillermo Edwards Matte	29 August 1922	21 December 1922
	Ricardo Valdés Bustamante	21 December 1922	12 January 1923
	Aníbal Rodríguez Herrera	12 January 1923	16 March 1923	PN
	Víctor R. Celis Maturana	16 March 1923	14 June 1923	PR
	Agustín Correa Bravo	14 June 1923	2 July 1923	PLD
	Ramón Subercaseaux Pérez	2 July 1923	3 January 1924	PN
	Enrique Zañartu Prieto	3 January 1924	1 February 1924	PLD
	Samuel Claro Lastarria	1 February 1924	14 March 1924	PL
	Belfor Fernández Rodríguez	14 March 1924	20 July 1924	PLD
	Enrique Zañartu Prieto	20 July 1924	5 September 1924	PLD

• PAL - Partido Agrario Laborista
• PC - Partido Conservador
• PCCh - Partido Comunista de Chile
• PCSC - Partido Conservador Social Cristiano
• PCU - Partido Conservador Unido
• PDC - Partido Democrata Cristiano
• Ind - Independiente
• PL - Partido Liberal
• PLD - Partido Liberal Democrático
• MAPU - Movimiento de Acción Popular Unitaria
• PN - Partido Nacional
• PNa - Partido Unión Nacionalista
• PR - Partido Radical
• PRDe - Partido Radical Democrático
• PS - Partido Socialista