THE CHILEAN GOVERNMENT wants to stop signing new tax stability contracts with foreign investors.

The contracts guarantee foreign companies undertaking new projects in Chile that the taxes that will apply to the projects will not change. The Pinochet regime introduced the concept 40 years ago at a time when foreign investors were skittish about investing in Chile. The government says such assurances are no longer needed.

The proposal will have to be debated in Congress.

The government is proposing a four-year transition after 2015 during which contracts would still be signed, but guaranteeing a tax rate of no more than 44.45%, the new rate introduced in last year’s tax overhaul, compared to the previous rate of 42%.

Keith Martin in Washington