Chile - president will raise $8.4 billion to rebuild from earthquake including hiking tobacco taxes..

April 20, 2010 - President Sebastian Pinera said on Friday, April 16th Chile will raise $8.4 billion to rebuild towns and infrastructure ravaged by a massive February 27 earthquake by tapping foreign markets, copper-boom savings and hiking taxes on companies, miners and tobacco.

Pinera said he would permanently raise the tax on tobacco, both to help fund reconstruction and to seek a healthier Chile, a measure the government estimates will raise an additional $990 million in revenue over four years.

Chiletabacos, owned by British American Tobacco (BAT), virtually monopolizes the tobacco industry, controlling 96 percent of the market. It pays $600 million in tax revenues every year and several former Chilean cabinet ministers sit on its board of directors. (Chile's anti-tobacco law ineffective..)

Reconstruction will test the administration of conservative billionaire Pinera, who took power in March after the disaster killed hundreds, wrecked towns and roads, and hammered the wood pulp, fishing, fruit and wine industries. Pinera's victory ended 20 years of center-left rule.

Reference: UPDATE 4-Chile to raise taxes, issue debt for quake rebuild by Alonso Soto Additional reporting by Simon Gardner, Antonio de la Jara, Juana Casas, Fabian Cambero and Alvaro Tapia in SANTIAGO; Writing by Simon Gardner, Reuters, 4/16/2010.