Mexico Lawmakers Reject Value Added Tax Hike Yvonne Reyes Campos - The News
go to original November 24, 2012

MEXICO CITY – National Action Party (PAN), Democratic Revolution Party (PRD) and Labor Party (PT) deputies said this week that they were in favor of reforming the country’s tax code, but that modifying the current value added tax would mean economic hardship for the general public.

Chamber of Deputies Finances Committee President and PAN Deputy José Isabel Trejo said that global food prices are already high and that “if (the value added tax) is raised it would be a huge blow to consumers ... discussions should not begin with the value added tax, but rather by understanding different sector’s positions on (taxes).”

PT Deputy Vice Coordinator Ricardo Cantú Garza said that increasing the value added tax would not increase revenue for Mexico and that it would reduce spending and job creation.

“We think that the value added tax should not be raised, that would be harmful for stimulating Mexico’s domestic economy and would reduce consumer spending,” he said, adding that Mexico “should follow in the footsteps of our northern neighbors, who have a value added tax of 8 percent.”

Cantú Garza said Mexico need only to look to Spain, a country which raised its value added tax to 22 percent and continues to wallow in a fiscal and social turmoil as it deals with harsh austerity measures.

PRD Deputy Jonathan Jardínes Fraire said that it is necessary to promote fiscal policy that establishes an equitable and proportional tax rate for all Mexicans.

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