|
|
|
 Business News | February 2008 
No Inflation Impact Seen From New Mexico Tax - Cenbank
 Jason Lange & Luis Rojas Mena - Reuters
go to original
| | Mexican central bank Governor Guillermo Ortiz | | |
Mexico City - Mexican central bank Governor Guillermo Ortiz said on Tuesday he has seen no inflationary impact yet from a new corporate tax, which sets a minimum 17 percent levy on earnings.
The business tax, called the IETU, took effect on Jan. 1 as part of wide-ranging tax overhaul. Economists particulary feared that companies would compensate for the levy by raising the prices of their goods and services - fueling inflation.
"For the moment, we have not seen an impact on prices," Ortiz said at an event.
Mexican inflation eased in early February, reinforcing expectations the central bank will cut interest rates this year as the economy slows, though high core prices hinted the bank may still face trouble.
Inflation in the 12-month period through the first half of February slowed to 3.61 percent from 3.70 percent at the end of January. The figures came in below the central bank's expected range of 3.75 percent and 4.25 percent for the first quarter of this year.
The minimum tax is meant to hit companies that in the past have taken advantage of several loopholes to slash their tax bill.
Companies in Mexico that already pay at least the new 17 percent minimum level of income tax will not be affected by the IETU. Competition from those firms will pressure rivals affected by the IETU to absorb the tax burden rather than raise their prices, the government hopes. |
| |
|
Vallarta Weddings
Tell a Friend
Site Map
Print this Page
Email Us