Mexican Business Slams Government’s Tax Plans

by Mike Godfrey, Tax-News.com, Washington

15 November 2004

Mexican business leaders expressed harsh criticism over government tax proposals last week and accused legislators of putting politics before the interests of the nation, according to reports.

As the Mexican Senate prepared to vote on new tax measures, the president of the Business Coordinating Council, Jose Luis Barraza reiterated the BCC's “absolute disagreement” with the tax plans which he said would “suppress economic growth.”

In particular, businesses are objecting to a proposal that will only allow businesses to deduct inventory purchases when goods are sold, instead of when purchases are made.

Speaking out against the measure, Barraza told a press conference that the new rule would “reduce the flow of disposable funds that businesses use for growth and will become a constraint on investment and job creation".

Raul Padillo, president of the National Confederation of Chambers of Commerce, was also critical of the plan, warning that changes in inventory costs would be “lethal for small and medium-sized businesses”.

Meanwhile, the Council has criticized the government for failing to tackle other issues such as simplification of the tax system and widening of the tax base.

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