Left's Backing Boosts Mexico Tax Plan Chances, Right Remains Skeptical Ana Isabel Martinez and Simon Gardner - Reuters
go to original September 9, 2013

Mexico's President Enrique Pena Nieto looks on during his speech in the presentation of the fiscal reform at Los Pinos presidential residence in Mexico City, September 8, 2013. (Reuters/Edgard Garrido)

MEXICO CITY - The Mexican government's long-awaited tax reform won support from the leftist opposition on Monday, boosting its chances of passing Congress, but the center-right was more skeptical about a plan that foresees running up a budget deficit.

Comprising a mix of higher taxes on the wealthier, a new charge on stock market gains and scrapping two-thirds of Mexico's tax breaks and exemptions, the plan was less aggressive than many had expected before its unveiling on Sunday.

Business groups and economists expressed disappointment that President Enrique Pena Nieto had not opted for a deeper reform, but the bill put forward appears designed to chart a middle course through Congress, where the government lacks a majority.

"Fundamentally, I'd say that there are sufficient grounds for us to vote in favor of this," Jesus Zambrano, leader of Mexico's main leftist political grouping, the Party of the Democratic Revolution (PRD), told Reuters.

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