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Accountants Call For Lower Taxes In Mexico

by Mike Godfrey,, Washington

12 December 2014

The President of the Mexican Institute of Public Accountants (IMCP), Leobardo Brizuela, has expressed support for tax cuts in 2016, as suggested by the head of Mexico's Secretariat of Finance and Public Credit, Luis Videgaray Caso.

In a recent interview with Radio Formula, Videgaray Caso said that the Government is open to reducing taxes, but said such a move will have to wait until 2016, as the Budget for 2015 has already been passed.

Speaking at a press conference, Brizuela said that tax increases introduced under this year's tax reform have undermined the country's competitiveness and stunted its economic growth.

The reforms implemented this year include the introduction of three new income tax brackets, an increase in the top rate of income tax from 30 percent to 35 percent, and new taxes on certain dividends and gains.

According to the Paying Taxes 2015 report published by the World Bank Group and PwC, Mexican companies face a total tax rate of 51.8 percent, compared to the 38.9 percent average for North American countries. The total tax rate measures the average tax burden incurred by a medium-sized company.

Brizuela said that Mexico needs to adjust its fiscal policies in order to promote economic growth. He said that the authorities should take into account suggestions from the private sector about how to create a more competitive tax environment.

Mexico's real gross domestic product (GDP) grew 1.1 percent in 2013, reflecting weak external demand and a decline in construction activity, but growth is projected to recover to 2.4 percent this year, according to the International Monetary Fund.

TAGS: Finance | tax | economics | business | fiscal policy | gross domestic product (GDP) | budget | International Monetary Fund (IMF) | Mexico | dividends | tax reform | construction | North America | Tax

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