Ministry of Finance (Chile)


The Ministry of Finance of Chile 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 Nicolás Grau.
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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". 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 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 due to the Great Recession In 2005, key elements of this voluntary policy were incorporated into legislation through the Fiscal Responsibility Law.
However, the 2008 financial crisis 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 and the Economic and Social Stabilization Fund. 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 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 and the income tax. The value added tax is levied on sales of goods and services 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, 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 or the Additional Tax. 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

Ministers of finance

PictureNameEntered officeExited officeNotesAppointed by
Hipólito de Villegas y Fernández7 September 181730 March 1818Bernardo O'Higgins
Anselmo de la Cruz y Bahamonde30 March 181814 April 1818Bernardo O'Higgins
José Miguel Infante y Rojas14 April 181827 June 1818Bernardo O'Higgins
Anselmo de la Cruz y Bahamonde27 June 18182 May 1820Bernardo O'Higgins
José Antonio Rodríguez Aldea2 May 182028 January 1823Bernardo O'Higgins
Agustín Vial Santelices28 January 18238 April 1823Government Junta
Pedro Nolasco Mena y Ramírez Rivilla8 April 182312 July 1823Ramón Freire
Diego José Benavente Bustamante12 July 182322 February 1825Ramón Freire
José Ignacio Eyzaguirre Arechavala22 February 182518 June 1825Ramón Freire
Rafael Correa de Saa Lazón18 June 18258 October 1825Ramón Freire
Diego José Benavente Bustamante8 October 182517 October 1825Ramón Freire
Manuel José Gandarillas Guzmán17 October 18259 September 1826Ramón Freire
Agustín Vial Santelices12 September 182620 October 1826Agustín Eyzaguirre
Melchor de Santiago Concha y Cerda20 October 182622 October 1826Agustín Eyzaguirre
Ventura Blanco Encalada8 March 182723 July 1828ReappointedRamón Freire
Francisco Ruiz-Tagle Portales23 July 182816 July 1829Francisco Antonio Pinto
Manuel José Huici16 July 18299 November 1829Francisco Ramón Vicuña
Pedro José Prado Montaner9 November 18297 December 1829Francisco Ramón Vicuña
Mariano Egaña Fabres20 February 183018 March 1830Francisco Ruiz-Tagle
Juan Francisco Meneses Echanes18 March 183015 June 1830Francisco Ruiz-Tagle
Manuel Rengifo Cárdenas15 June 18309 November 1835José Tomás Ovalle
Joaquín Tocornal Jiménez9 November 183514 April 1841José Joaquín Prieto
Rafael Correa de Saa Lazón14 April 184118 September 1841José Joaquín Prieto
Manuel Rengifo Cárdenas18 September 184110 April 1845Manuel Bulnes
José Joaquín Pérez Mascayano10 April 184522 September 1846Manuel Bulnes
Manuel Camilo Vial Formas22 September 18469 May 1848InterimManuel Bulnes
Salvador Sanfuentes Torres9 May 184812 June 1849InterimManuel Bulnes
Antonio García Reyes12 June 184919 April 1850Manuel Bulnes
Jerónimo Urmeneta García-Abello19 April 18507 May 1852Appointed byManuel Bulnes
Jerónimo Urmeneta García-Abello19 April 18507 May 1852Reappointed byManuel Montt
José Guillermo Waddington Urrutia7 May 18527 January 1854Manuel Montt
José María Berganza Lorca7 January 185418 September 1856InterimManuel Montt
José Francisco Gana López18 September 185631 October 1856InterimManuel Montt
Alejandro Vial Guzmán31 October 185629 September 1857Manuel Montt
Francisco de Borja Solar Gorostiaga29 September 18578 January 1858Manuel Montt
Matías Ovalle Errázuriz8 January 18583 October 1859Manuel Montt
Jovino Novoa Vidal3 October 18591 October 1861Manuel Montt
Manuel Rengifo Vial1 October 18619 July 1862José Joaquín Pérez
José Victorino Lastarria Santander9 July 186216 January 1863José Joaquín Pérez
Domingo Santa María González16 January 186310 May 1864José Joaquín Pérez
Alejandro Reyes Cotapos10 May 18647 January 1869José Joaquín Pérez
Melchor de Concha y Toro7 January 18692 August 1870José Joaquín Pérez
José Antonio Gandarillas Luco2 August 187018 September 1871José Joaquín Pérez
Camilo Cobo Gutiérrez18 September 187112 April 1872Federico Errázuriz Zañartu
Ramón Barros Luco12 April 187218 September 1876Federico Errázuriz Zañartu
Rafael Sotomayor Baeza18 September 187627 October 1877Aníbal Pinto
Augusto Matte Pérez27 October 18775 August 1878Aníbal Pinto
Julio Zegers Samaniego5 August 187817 April 1879Aníbal Pinto
Augusto Matte Pérez17 April 187916 June 1880Aníbal Pinto
José Alfonso Cavada16 June 188018 September 1881Aníbal Pinto
Luis Aldunate Carrera18 September 188125 April 1882Domingo Santa María
Pedro Lucio Cuadra Luque25 April 188218 January 1884Domingo Santa María
Ramón Barros Luco18 January 18845 September 1885Domingo Santa María
Pedro Nolasco Gandarillas Luco5 September 188513 October 1885Domingo Santa María
Hermógenes Pérez de Arce Lopetegui13 October 188518 September 1886Domingo Santa María
Agustín Edwards Ross18 September 188613 April 1888José Manuel Balmaceda
Enrique Salvador Sanfuentes Andonaegui13 April 18882 November 1888José Manuel Balmaceda
Justiniano Sotomayor Guzmán2 November 188811 June 1889José Manuel Balmaceda
Juan de Dios Vial Guzmán11 June 188923 October 1889José Manuel Balmaceda
Pedro Montt Montt23 October 188921 January 1890José Manuel Balmaceda
Pedro Nolasco Gandarillas Luco21 January 18907 August 1890José Manuel Balmaceda
Manuel Salustio Fernández Pradel7 August 189015 October 1890José Manuel Balmaceda
Lauro Barros Valdés15 October 189026 December 1890José Manuel Balmaceda
Anfión Muñoz Muñoz26 December 18905 January 1891José Manuel Balmaceda
Ismael Pérez Montt27 December 18905 January 1891InterimJosé Manuel Balmaceda
José Miguel Valdés Carrera5 January 189129 March 1891José Manuel Balmaceda
Manuel Arístides Zañartu Zañartu29 March 189129 July 1891José Manuel Balmaceda
Manuel José Yrarrázaval Larraín29 July 189129 August 1891José Manuel Balmaceda
Joaquín Walker Martínez7 September 189126 December 1891Revolutionary Junta of Iquique
Francisco Valdes Vergara26 December 189114 March 1892Jorge Montt
Agustin Edwards Ross14 March 18929 July 1892Jorge Montt
Enrique Mac Iver9 July 189222 April 1893Jorge Montt
Alejandro Vial Guzmán22 April 189326 April 1894Jorge Montt
Carlos Riesco Errázuriz26 April 18947 December 1894Jorge Montt
Manuel Salustio Fernández7 December 18941 August 1895Jorge Montt
Enrique Mac Iver1 August 189524 November 1895Jorge Montt
Hermógenes Pérez de Arce Lopetegui24 November 189518 September 1896Jorge Montt
José Francisco Fabres18 September 189620 November 1896Federico Errázuriz Echaurren
Justiniano Sotomayor Guzmán20 November 189626 June 1897Federico Errázuriz Echaurren
Juan Enrique Tocornal26 June 189725 August 1897Federico Errázuriz Echaurren
Elías Fernández Albano25 August 189723 December 1897Federico Errázuriz Echaurren
Alberto González Errázuriz23 December 189714 April 1898Federico Errázuriz Echaurren
Darío Zañartu del Río14 April 189828 June 1898Federico Errázuriz Echaurren
Rafael Sotomayor Gaete28 June 189827 June 1899Federico Errázuriz Echaurren
Manuel Salinas González27 June 189914 October 1900Federico Errázuriz Echaurren
Ramón Santelices Cuevas14 October 19003 November 1900Federico Errázuriz Echaurren
Nicolás González Errázuriz3 November 190015 March 1901Federico Errázuriz Echaurren
Manuel Fernández García15 March 19011 May 1901Federico Errázuriz Echaurren
Juan Luis Sanfuentes Andonaegui1 May 19013 October 1901Federico Errázuriz Echaurren
Luis Barros Borgoño3 October 190118 November 1901Germán Riesco
Enrique Villegas Encalada18 November 19016 May 1902Germán Riesco
Guillermo Barros Jara6 May 190220 November 1902Germán Riesco
Ricardo Cruzat Hurtado20 November 19027 April 1903Germán Riesco
Manuel Salinas González7 April 19031 September 1903Germán Riesco
Miguel Cruchaga Tocornal1 September 190310 January 1904Germán Riesco
Ramón Santelices Cuevas10 January 190412 April 1904Germán Riesco
Guillermo Barros Jara12 April 190412 May 1904Germán Riesco
Maximiliano Ibáñez12 May 190430 October 1904Germán Riesco
Ernesto Hübner Bermúdez30 October 190418 March 1905Germán Riesco
Antonio Subercaseaux Pérez18 March 190521 October 1905Germán Riesco
Belfor Fernández21 October 190519 March 1906Germán Riesco
Ramón Santelices Cuevas19 March 19067 May 1906Germán Riesco
Joaquín Prieto Hurtado7 May 190618 September 1906Germán Riesco
José Raimundo del Río Soto Aguilar18 September 190629 October 1906Pedro Montt
Rafael Sotomayor Gaete29 October 190612 June 1907Pedro Montt
Ramón Subercaseaux Pérez12 June 190725 October 1907Pedro Montt
Enrique A. Rodríguez25 October 190729 August 1908Pedro Montt
Pedro Nicolás Montenegro Onel29 August 190822 January 1909Pedro Montt
Luis Devoto A.22 January 190915 June 1909Pedro Montt
Joaquín Figueroa Larraín15 June 190915 September 1909Pedro Montt
Manuel Salinas González15 September 190925 June 1910Pedro Montt
Carlos Balmaceda Saavedra25 June 191023 December 1910Pedro Montt
José Raimundo del Río Soto Aguilar23 December 191011 January 1911Ramón Barros Luco
Roberto Sánchez García de la Huerta11 April 191115 August 1911Ramón Barros Luco
Pedro Nicolás Montenegro Onel15 August 191120 May 1912Ramón Barros Luco
Samuel Claro Lastarria20 May 19128 August 1912Ramón Barros Luco
Manuel Rivas Vicuña8 August 19128 April 1913Ramón Barros Luco
Pedro García de la Huerta Izquierdo8 August 191316 June 1913Ramón Barros Luco
Arturo Alessandri Palma16 June 191317 November 1913Ramón Barros Luco
Ricardo Salas Edwards17 November 19133 September 1914Ramón Barros Luco
Alfredo Barros Errázuriz3 September 19146 September 1914Ramón Barros Luco
Enrique Oyarzún Mondaca6 September 191415 September 1914Ramón Barros Luco
Alberto Edwards Argandoña15 September 191415 December 1915Ramón Barros Luco
Manuel García de la Huerta15 December 191523 December 1915Ramón Barros Luco
Ramón Santelices Cuevas23 December 19158 January 1916PCJuan Luis Sanfuentes
Armando Quezada Acharán8 January 19161 July 1916PRJuan Luis Sanfuentes
Luis Devoto Arrizaga1 July 191620 November 1916PLDJuan Luis Sanfuentes
Arturo Prat Carvajal20 November 191614 July 1917PNJuan Luis Sanfuentes
Armando Quezada Acharán14 July 191712 October 1917PRJuan Luis Sanfuentes
Ricardo Salas Edwards12 October 191718 January 1918PCJuan Luis Sanfuentes
Manuel Hederra Concha18 January 191827 April 1918PNJuan Luis Sanfuentes
Luis Claro Solar27 April 19186 September 1918PLJuan Luis Sanfuentes
Luis Aníbal Barrios6 September 191825 November 1918PRJuan Luis Sanfuentes
Luis Claro Solar25 November 19189 July 1919PLJuan Luis Sanfuentes
Julio Philippi Bihl9 July 19198 November 1919PLJuan Luis Sanfuentes
Ramón Subercaseaux Pérez8 November 191926 March 1920PNaJuan Luis Sanfuentes
Enrique Oyarzún Mondaca26 March 192016 June 1920PRJuan Luis Sanfuentes
Antonio Viera Gallo16 June 19201 July 1920PNJuan Luis Sanfuentes
Francisco Garcés Gana1 July 192023 December 1920PLJuan Luis Sanfuentes
Daniel Martner23 December 192012 May 1921PRArturo Alessandri
Enrique Oyarzún Mondaca12 May 192116 August 1921PRArturo Alessandri
Víctor R. Celis Maturana16 August 19213 November 1921PRArturo Alessandri
Francisco Garcés Gana3 November 192122 March 1922PLArturo Alessandri
Galvarino Gallardo Nieto22 March 19221 April 1922PRArturo Alessandri
Samuel Claro Lastarria1 April 192229 August 1922PLArturo Alessandri
Guillermo Edwards Matte29 August 192221 December 1922PLArturo Alessandri
Ricardo Valdés Bustamante21 December 192212 January 1923PLArturo Alessandri
Aníbal Rodríguez Herrera12 January 192316 March 1923PNArturo Alessandri
Víctor R. Celis Maturana16 March 192314 June 1923PRArturo Alessandri
Agustín Correa Bravo14 June 19232 July 1923PLDArturo Alessandri
Ramón Subercaseaux Pérez2 July 19233 January 1924PNArturo Alessandri
Enrique Zañartu Prieto3 January 19241 February 1924PLDArturo Alessandri
Samuel Claro Lastarria1 February 192414 March 1924PLArturo Alessandri
Belfor Fernández Rodríguez14 March 192420 July 1924PLDArturo Alessandri
Enrique Zañartu Prieto20 July 19245 September 1924PLDArturo Alessandri