Mexican President Pushes Again For Tax Reform

by Mike Godfrey, Tax-News.com, Washington

19 August 2004

According to a Financial Times report, Mexican President Vicente Fox on Tuesday launched a new attempt to reform the country's tax system.

Unveiling the results of the seven-month National Tax Convention, President Fox announced that:

"We've talked in a democratic spirit, we've listened and we've been heard, and we've elevated the voice of the convention to strengthen the republican and federal spirit."

Following the defeat of proposals put forward in 2001 and again in 2003 to impose VAT on food and medicine, the President is reportedly hoping that the more moderate proposals agreed upon during the Tax Convention, and already approved by the state governors, will be able to pass Congress.

Suggestions put forward by the Convention include reducing the national VAT rate from 15% to 12%, and allowing the states to collect the remaining 3%. Although the specific issue of VAT on food and medicine was not resolved, the Convention has recommended that the list of exempted products be significantly revised.

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