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 Business News | June 2007 
Mexican Lawmakers Expect Tax Proposals in June
 Jason Lange - Reuters
| | Mexico's President Felipe Calderon speaks during an Italy-Mexico business forum in Milan June 5, 2007. (Reuters) |
Mexico City - Mexican President Felipe Calderon is likely to unveil a long-awaited tax reform proposal by the end of this month that might include measures to let states collect more taxes, senior lawmakers said on Monday.
Calderon's team has been in talks with lawmakers since January on how to boost government revenue and reduce Mexico's dependence on oil exports.
Optimism about a potential deal has driven Mexico's stock market up 4.7 percent since last Tuesday.
Many investors expect rating agencies to raise Mexico's debt rating if Congress substantially increases tax revenue. Mexico's tax take is among the smallest in Latin America relative to the size of its economy.
Details on the talks have been scant, but three ranking members of the lower house finance committee told Reuters on Monday that Calderon and a key opposition party agreed that state governments should have more power to collect taxes.
"We feel states should get their revenues directly without having to depend on the federal government," said Horacio Garza, a finance committee secretary from the Party of Institutional Revolution (PRI).
A deal with the PRI is seen as Calderon's best bet to advance tax reform because the president's conservative National Action Party (PAN) lacks a majority in Congress.
Two PAN lawmakers who are also secretaries on the finance committee said the proposal would include measures to boost state governments' role in tax collection.
All three agreed that Calderon's proposal would come towards the end of June and that Congress would likely approve the proposal by the end of July.
Last week Calderon said Mexico would have fiscal reform "soon". Asked in a television interview on Monday if he would introduce a reform proposal this year, Calderon said it was "very probable".
"From the information we have from the Finance Ministry, the president's proposal would be arriving at the lower house just into the second half of this month," said PAN lawmaker David Figueroa.
Many investors expect the PRI and the PAN to rekindle an alliance forged earlier this year over a landmark pension reform. Together they have a majority in Congress.
The Finance Ministry has declined to give details about the timing or content of any reform proposal. On Friday a ministry spokesman said the government "had so far not defined the specific content of the proposal".
Garza confirmed reports that the government and the PRI had discussed eliminating tax breaks for food and medicine producers, though he said there was no deal on the issue. |
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