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The Chilean parliament building. Image © Shutterstock

The Chamber of Deputies approved a bill on Monday that would finance president Sebastián Piñera’s plans to set up a universal pension, but made changes to the government’s original proposals.

Lawmakers added a wealth tax of 1.5% on assets owned over $5m, and of 2.5% on those owned over $22m. Finance minister Rodrigo Cerda has challenged their decision, claiming the executive has sole responsibility on the issue of taxation.

The bill would also introduce a 10% capital gains tax, eliminate VAT exemptions for construction, end tax benefits on third homes and apply inheritance tax to life insurance payouts.

Not including the wealth tax, which has not been officially evaluated, measures in the bill would contribute more than 43bn pesos (£38m), according to the Chamber of Deputies.

Piñera, whose term ends in March following his loss in the December presidential elections, announced the introduction of a universal guaranteed pension late last year.

Under his plans, all but the wealthiest 10% of over-65s will receive a guaranteed monthly payment, whether they work or not.

Until now, Chileans have had to rely solely on private pensions. “In this way, the [state pension] will guarantee that no pensioner in our country falls below the poverty line,” said Piñera last month.

The president-elect, Gabriel Boric, has also expressed support for a universal pension, as well as more radical ideas such as the wealth tax proposed by the lower house.