Mexico's Government Willing to Revise Tax Plan Seen Hitting Middle Class Michael O'Boyle and Luis Rojas - Reuters
go to original September 12, 2013

LISTEN: Mexico's president has unveiled a major shakeup of the country's tax system. His administration says it's aimed at capturing more of Mexico's paltry tax collection. Critics say it's unfairly targeting the middle class. Among the items slated for taxing: dog food and private school tuition. (Carrie Kahn/NPR)

MEXICO CITY - The Mexican government said on Wednesday it was open to exploring alternatives to some of the more divisive proposals in a newly unveiled tax overhaul, faced with a growing chorus of resistance to measures that critics say hurt the middle class.

President Enrique Pena Nieto presented the government's tax reform proposal on Sunday. Along with revamps of the energy and telecoms sectors, he wants to unlock Mexico's economic potential by raising taxes for higher earners and imposing a levy on stock market gains.

Pena Nieto shied away from applying a sales tax to food and medicine, which would broaden the range of taxable of goods. Many believe that would be the best way of lifting tax revenues and extracting income from Mexico's large informal sector.

However, political opponents have voiced dismay at measures like taxing private education, ending mortgage rebates and lifting the top income tax rate to 32 percent from 30 percent for those who earn more than 500,000 pesos ($37,800) a year.

Senior officials from Pena Nieto's ruling centrist Institutional Revolutionary Party have acknowledged the concerns.

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