Mexico's 2002 Budget Proposal Missing New Tax Reform Funds

by Mike Godfrey, Tax-News.com, New York

12 November 2001

The Mexican government has sent an austere 2002 budget to Congress excluding additional revenues from tax reforms although President Vicente Fox says he is still hopeful that they will implemented by year-end.

According to Reuters news agency, the President informed a meeting with the Association of International Financial Institutions that he was confident Congress would boost revenues by approving the financial reform measures before its current session ends on December, 15. 'We're reaching consensus and surely it will come in this ordinary period of sessions,' he said.

However, members of the opposition are not so optimistic: 'There's been no change in the political situation inside Congress,' said Oscar Levin of the former ruling Institutional Revolutionary Party (PRI) and president of the lower house's finance committee. Levin described Fox's remarks as 'clearly just more pressure' to force Congress to pass the reform sooner rather than later.

Congress's delay over the reform package has drawn criticism from Mexico's business community. Jorge Espina, president of the Comparmex employsers group told the press the country cannot be 'held up just because they can't agree with each other.'

Fox said the 2002 budget proposal aims to preserve the same deficit target as last year at 0.65 percent of GDP. Government officials claim they have pinpointed areas where the extra monies will be allocated if the tax reforms are passed. 'With fiscal reform, the panorama is much more attractive,' Fox said.

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