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Congress Revives Talks on IVA Hikes
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January 05, 2010
 |  | Natural gas is one of many goods and services that costs more this year. |  | | |
Talks regarding an increase in Mexico's value-added tax (IVA) are being revived in Congress, dividing many Institutional Revolutionary Party (PRI) lawmakers.
The new year brought hikes to the price of nearly everything, from tortillas, gas and beer to cable television and Metro fares.
Puebla Deputy Fernando Morales said Monday that with all of the increases, the country will face a tough year, saying that continuing the marathon of price hikes is unfair.
President Felipe Calderón last autumn failed to sway Congress into imposing a generalized 2 percent tax (“an IVA increase in disguise,” opponents accused) on every good and service, including currently exempt food and medicine. Instead, Congress voted to raise IVA by 1 percent, to 16 percent, and hike the ISR from 28 percent to 30 percent. Some deputies, however, are rekindling interest.
Morales said he is opposed to his counterpart Jorge Herrera's proposal to tax virtually everything.
“Us deputies wouldn't have mothers if we started taxing food and medicine,” Morales said, calling Herrera's proposal respectable, “but personally I don't agree with it.”
PRI coordinator in the Chamber of Deputies, Francisco Rojas, said that upcoming treasury reform negotiations will focus on three areas: a review of social spending and a reduction in government spending; a review of special fiscal regimens that account for a loss of 500 billion pesos annually in tax collection; and treasury responsibilities of states and municipalities. Talks of further sales tax hikes, Rojas said, are possible, too.
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