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Mexican Revenues Ahead Of Target But Tax Reform Ruled Out

by Mike Godfrey,, Washington

07 August 2017

Mexico's tax agency has said that revenue collections exceeded targets during the first half of the year.

Revenues amounted to MXN1.47 trillion (USD82.5bn), up three percent, and up MXN61bn against targets.

Despite strong revenue collections, the Mexican Government recently confirmed that it expects to not make drastic changes to the tax regime this year.

Finance Secretary Jose Antonio Meade told local media that the Government considers that stable tax policies would be most beneficial for the country, given the uncertainty surrounding the nascent negotiations on the future of the North American Free Trade Agreement.

He was responding to proposals from the employers association Coparmex, which has proposed 10 tax reform actions to improve Mexico's competitiveness, namely that the Mexican Government should consider:

  • Bringing the corporate income tax rate into line with the average rate for Organisation for Economic Cooperation and Development member states at 24.66 percent;
  • Reworking taxes on dividends to encourage investment and job creation;
  • Reducing the rate of income tax for those who earn up to MXN10,000 (USD560) a month, while maintaining the maximum levy of 35 percent for those with higher incomes;
  • Following OECD and G20 recommendations for resolving international tax disputes;
  • Expanding the taxpayer base, reducing value-added tax breaks, and providing support for lower-income taxpayers;
  • Improving the effectiveness of excise duties in line with international best practices;
  • Strengthening the discretionary powers of the tax authorities;
  • Improving property tax collections; and
  • Simplifying the country's tax system and compliance processes.

Meade said, while there is little fiscal space to bring about reform, government officials will consider the proposals.

TAGS: tax | investment | property tax | export duty | law | Mexico | tax rates | tax breaks | import duty | tax reform | trade

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