| | |  News Around the Republic of Mexico | June 2009 
Mexico's Calderon Plans September Tax Proposal - Aide
 Miguel Angel Gutierrez - Reuters
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June 28, 2009
 |  | What is expected are changes to income taxes (to individuals and companies) to increase investment and stop punishing businessmen.
- Cesar Nava |  | | |
Monterrey, Mexico - Mexican President Felipe Calderon will propose a tax reform in September aimed at raising Mexico's low tax take by widening the taxpayer base, a member of his inner circle said on Friday.
Former presidential secretary Cesar Nava, who is now a ruling party candidate for a seat in the lower house of Congress, did not provide details on the plan to widen the tax base.
Nava said the government would not seek to raise tax on goods and services and would offer targeted tax cuts for businesses to help secure the passage of the legislation.
Calderon's National Action Party, or PAN, is headed for a setback in congressional elections on July 5, meaning the government will need closer negotiation with opposition parties to pass laws.
Mexico is under pressure to raise its tax revenues and reduce a dependence on oil exports as the country's crude production wanes. Ratings agencies are pondering a downgrade to Mexico's debt without an improvement to its fiscal outlook.
Nava told reporters the president will also propose trimming government and Congress running costs in the tax proposal, which will be part of the 2010 budget bill submitted in mid-September.
"I don't see, or propose, changes to the value-added tax. We can't ask people for more sacrifices," said Nava, who is widely seen becoming the leader of Calderon's conservative National Action Party, or PAN, in the lower house.
Nava is an up-and-coming PAN politician expected to push Calderon's agenda in Congress.
Mexico charges a 15 percent added value tax, or IVA, on everything from cosmetics to car rentals, but food and medicine are exempt and the PAN has struggled to persuade Congress to remove the exemptions.
All 500 seats in Mexico's lower house are up for grabs in the July 5 election. The most recent polls show the centrist Institutional Revolutionary Party, or PRI, is set to overtake the PAN as the biggest force in the house.
"What is expected are changes to income taxes (to individuals and companies) to increase investment and stop punishing businessmen," Nava said, on board a private plane en route to the northern industrial city of Monterrey.
Mexico introduced an additional tax for businesses last year that caused companies to use two separate accounting methods, increasing their costs.
Lawmakers must vote on the budget no later than Nov. 15.
(Writing by Cyntia Barrera Diaz; Editing by Diane Craft) |
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