Mexico's President Says Tax Reforms To Be Approved In Two Weeks

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

09 October 2001

In a US television interview, Mexican President Vicente Fox has confirmed that the much-debated tax reform package, aimed at increasing the tax base by US$12bn in its first year and boosting the economy, will go through Congress within the next couple of weeks.

Fox told the Wall Street Week program: 'We must build human capital in this country. And we're working on that through putting an initiative in Congress for a fiscal ... a tax reform, which I'm about to get through in the next two weeks.'

He would not be drawn on whether his controversial plan to impose a 15 per cent VAT on food stuffs and medicines would be included in the package. The proposal attracted a lot of criticism from many politicians (including some from his own National Action Party - PAN) who argued that the tax would intensify the plight of the country's 40 million poor people.

America buys around 85 per cent of Mexico's exports and the Mexican economy experienced a sharp downturn following the September 11 terrorist attacks in America. The country's GDP has been steadily slowing down since the attacks but Fox insisted that he is still aiming to stimulate fast economic growth.

'I'm still responding to my commitments and one of them, which was key and crucial, was that we would push the Mexican economy to grow at levels of seven percent a year and we will do that within the term,' he said.

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