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 News Around the Republic of Mexico | July 2007 
Calderon to Adjust Tax Reform Proposal
 Jason Lange - Reuters
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 |  | We are working intensely to improve and correct the proposal, attending to important and valuable suggestions from industry and business to avoid an impact on investment and employment
- President Felipe Calderon |  | | Mexico City - Mexican President Felipe Calderon said on Thursday he was making changes to his vaunted tax reform proposal in response to suggestions by disgruntled companies.
The proposal Calderon unveiled in June would raise Mexico's paltry tax take by about 3 percent of gross domestic product, largely through a minimum income tax on companies.
Economists have long warned Mexico is heading for financial disaster unless it increases tax revenues to offset a forecast drop in crude oil output, which currently funds about one third of the federal budget.
Mexican businesses, however, have complained the proposed increase in their tax load would be too steep, and that the new law would discourage investment and cost the country jobs.
Calderon said those complaints were being addressed.
"We are working intensely to improve and correct the proposal, attending to important and valuable suggestions from industry and business to avoid an impact on investment and employment," Calderon said at an automobile factory in the northern state of Nuevo Leon.
Calderon's conservative National Action Party lacks a majority in Congress and is in talks with the opposition Institutional Revolutionary Party to work out changes to the bill.
Mexico's tax take is currently about 10 percent of gross domestic product, the second lowest in Latin America.
Finance Minister Agustin Carstens on Wednesday praised Congress's efforts to "perfect" Calderon's proposal, and said he was sure Congress would find a way to boost revenue this year. |
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