Pena Nieto Waters Down Mexico Tax Reforms, Avoids Sales Tax on Food, Medicine Juan Montes and Anthony Harrup - WSJ.com
go to original September 9, 2013

Mexico reform proposes raising top tax rate, levy on stock trades, will not impose new tax on food and medicines although it will levy "health" taxes on soda and roll back gasoline subsidies. (NTDTV)

MEXICO CITY — Mexico's government unveiled a long-awaited tax overhaul Sunday, seeking to boost its weak non-oil tax take by raising rates on top earners, introducing a capital-gains tax and closing some corporate loopholes.

The proposal, which still needs congressional approval, avoided a more controversial measure by leaving food and medicine exempt from sales taxes at a time when the economy has hit a soft patch and other government initiatives are facing street protests.

The revamp of the tax system is expected to increase federal revenue by 1.4 percentage points of gross domestic product next year. The overhaul also seeks to raise funds for a social security network that will include unemployment benefits and a universal pension system for people over 65, a plan expected to be implemented by 2018. It also aims to reduce government dependence on oil revenue, which accounts for a third of income.

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