Chile presidential favorite Bachelet says would hike corporate tax
SANTIAGO, June 17 (Reuters) - Chilean presidential favorite Michelle Bachelet said on Sunday she would gradually hike corporate taxes to 25 percent from their current 20 percent, chiefly to fund an education overhaul, if she is elected to the presidency for a second time this year.
Bachelet, a popular center-leftist who served as president of the world's top copper-exporting nation from 2006 to 2010, is widely expected to win a Nov. 17 presidential election against a weakened right-wing bloc.
The increased tax take would be equivalent to 3 percentage points of Gross Domestic Product (GDP), or $8.2 billion, the pediatrician-turned-politician said in an interview with Canal 13 television on Sunday night.
"Look at the rates in countries we compare ourselves with or we seek to emulate," Bachelet said. "They have a far higher tax rate, and what we'd do with these three GDP points is reach the same level these countries had when they had our GDP per capita.
"This is not out of line or madness," she said, adding that the rate would be increased gradually over her potential four-year term.
The fruits of the reform would mostly go to finance a reform of Chile's stratified and costly education system, as well as to cover a structural deficit and "other items" of her agenda, Bachelet added.
In September, the Chilean Congress approved a tax reform championed by President Sebastian Pinera that increased the corporate tax rate to 20 percent from 17 percent. The average rate in Latin America in 2011 was 25.06 percent, according to accountancy firm KPMG.
Massive student-led protests demanding free education are at least a monthly occurrence in Chile, which has the widest gap between rich and poor among nations of the Organization for Economic Cooperation and Development (OECD).
Education, wages and equality are seen as key campaign issues.
The conservative Pinera is barred from running for re-election and any candidate put forward by his right-wing Alianza coalition is expected to struggle against Bachelet.
Former economy minister Pablo Longueira, a veteran party member who was close to ex-dictator Augusto Pinochet, and former defense minister Andres Allamand, another seasoned politician, are jostling for the Alianza candidacy.
They will face off in a June 30 primary.
(Writing by Alexandra Ulmer; Editing by David Brunnstrom)