Will Arizona soon see a lot more shoppers from Mexico?

December 5, 2013

Nogales

The Christian Science Monitor, 12/5/2013

On any given day, city residents here wait in long lines to cross the border and shop for bargains in Arizona. Gaby Medina is one of them. She visits the stores in Nogales, Ariz., at least twice a month to look for deals on clothes, which she says are often less expensive than in the border state of Sonora, Mexico.

Earlier this week, she filled several plastic bags with tops she bought for herself and relatives who lack a visa to visit the United States. Come January, Ms. Medina may head to the United States more frequently, she says. That’s when Mexico’s new sales tax will take effect, increasing to 16 percent from 11 percent in Mexico’s border cities and towns.

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Mexico Lower House OKs Revised Government Tax Plan

October 18, 2013

taxes accounting businessThe New York Times, 10/17/2013

Mexico’s Lower House of Congress on Thursday gave general approval to a revised government tax plan that aims to boost receipts by nearly 3 percent of GDP by 2018.

The bill was revised on Wednesday to raise the top income tax rate on a sliding scale to 35 percent, impose a 5 percent tax on junk food and roll back plans to apply sales tax on rents, mortgages, property sales and school fees.

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It’s a dog’s life: Fiscal reform in Mexico

September 16, 2013

The Economist, 9/14/2013

Since 2000, woman with shopping bags and credit cardwhen a Mexican film director made “Amores Perros”, a gritty tale about dogs, crime and violence, the status of canines in society has improved a lot. In middle-class parts of Mexico, dog hotels, stylists and even “organic” dog-poo bins are so prevalent that having a pooch has become a symbol of upward mobility. No wonder, then, that the middle class is howling over a proposed tax reform unveiled on September 8th. Not only does this seek to raise taxes on everything from salaries over 500,000 pesos ($38,000) to private schools. It even slaps a levy on dog biscuits.

The main aim of President Enrique Peña Nieto is to raise the tax take—which at 14% of GDP is below the Latin American average—and cut the government’s dependence on oil revenue. The most pressing question is whether the new tax code will help or hinder the revival of a stagnant economy.

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Mexico’s Government Willing to Revise Tax Plan Seen Hitting Middle Class

September 12, 2013

The New York Times, 9/11/2013

The Mexicpiggy bank with coinsan 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.

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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Mexico Proposes Tax on Sugary Beverages

September 10, 2013

The Wall Street Journal, 9/10/2013
Obese man

The Mexican government proposed penalizing sugary beverages with a special tax in an effort to contain twin epidemics of obesity and Type 2 diabetes, attempting to join countries such as France and Hungary in taxing sweet drinks in the name of public health.

President Enrique Peña Nieto’s tax overhaul unveiled on Sunday targets all sugar-sweetened beverages, not just soda, in a country where seven of 10 adults are either overweight or obese. An estimated 15% of people over age 20 have adult-onset diabetes.

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Mexico’s Finance Minister: Tax Changes Will Support Wider Deficit

September 10, 2013

Euro coinsThe Wall Street Journal, 9/10/2013

Mexico’s finance minister defended plans to increase taxes and boost public spending as part of an effort to revive a slowing economy, even though the plan involves a wider budget deficit next year.

The Mexican government is projecting a fiscal deficit for 2014 equivalent to 3.5% of gross domestic product in order to support growth, which slowed sharply in the first half of this year. The deficit forecast includes financed investment at state oil monopoly Petróleos Mexicanos.”

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Mexico Congress to hold special sessions, buttressing reforms

June 13, 2013

MEXICO CONGRESSReuters, 6/12/2013

Congressional leaders of Mexico’s main parties said on Wednesday they had agreed to hold two special sessions of Congress in July and August to tackle outstanding initiatives, paving the way for key energy and fiscal reforms to move forward in the autumn. President Enrique Pena Nieto plans to send measures aimed at boosting Mexico’s paltry tax take and overhauling ailing state-oil monopoly Pemex to Congress during the second regular session of Congress, which begins in September.

But an overhang of outstanding initiatives from the first congressional session, which ended in April, threatened to push back the much anticipated reforms. The two extraordinary sessions agreed to on Wednesday would be held in the second halves of July and August respectively, said Emilio Gamboa, who heads the ruling Institutional Revolutionary Party (PRI) in the Senate.

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Mexico aims to overhaul tax system, raise revenue

May 7, 2013

taxes -- counting coinsReuters, 5/6/2013

Tax breaks for attending “civic values” courses, tax-free sales of second-hand furniture, special treatment for call centers and an informal economy employing six out of 10 workers are all in the line of fire as Mexico prepares a long-awaited tax overhaul. An analysis of budget data shows Mexico’s extensive network of tax breaks and stimulus programs generate costs equal to about half the taxes actually collected.

Mexico has the lowest tax revenue in the 34-nation Organisation for Economic Co-operation and Development, crimping its ability to spend on health, infrastructure and social programs vital to boost living standards and growth in what is Latin America’s second-largest economy. Finance Minister Luis Videgaray has given few details of the overhaul, due to be presented in the autumn session of Congress, but has promised it will be “large,” reviewing both direct and indirect taxes and making those who earn more, pay more.

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No talks on key Mexico reforms until spat resolved: opposition

May 1, 2013

shutterstock_91867121Reuters, 4/30/13

A multi-party alliance to modernize Mexico’s economy will not discuss pending energy and tax reforms until an electoral spat between the opposition and the government is resolved, the head of the main leftist party said on Tuesday. Jesus Zambrano, chairman of the opposition Party of the Democratic Revolution (PRD), said there could be no talks on these reforms until the government had taken clear steps to punish those responsible for a vote-buying scandal in the Gulf state of Veracruz that was exposed this month.

“There won’t be (talks) about anything that is not to do with the political and legal … structure that will enable us to get out of this impasse,” he told Reuters in an interview. President Enrique Pena Nieto’s ruling Institutional Revolutionary Party, or PRI, has been forced on the defensive since the conservative National Action Party (PAN) put out recordings of PRI officials advocating the use of government funds to secure votes in Veracruz in elections due on July 7.

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Weekly News Summary: March 8th

March 8, 2013

Coffee by Flikr user samrevelThe Mexico Institute’s “Weekly News Summary,” released every Friday afternoon summarizes the week’s most prominent Mexico headlines published in the English-language press, as well as the most engaging opinion pieces by Mexican columnists.

What the English-language press had to say…

At its national assembly last Saturday, PRI members voted to end the party’s opposition to constitutional changes that would allow increased private participation in the oil sector, and reversed their previous position on the application of value added tax (IVA) to food and medicine. Leaders of the three main political parties continued to work on a “game-changing” telecommunications reform that is expected to shake up a highly monopolized sector of the Mexican economy. The Miami Herald’s Andres Oppenheimer addressed the recent optimism surrounding the Mexican economy, pointing out that many Mexicans remain skeptical. TIME’s Tim Padgett echoed the sentiment, drawing a parallel between current headlines labeling Mexico “the New China” or “the Aztec Tiger” and similar hype preceding Mexico’s 1994 peso crisis.

Following the excitement of last week’s arrest of Elba Esther Gordillo, journalists began focusing more closely on Peña Nieto’s education reform and the much-needed changes to the country’s lagging public education system. Carlos Slim topped the Forbes billionaire rankings for a fourth consecutive year, while drug kingpin Joaquin “El Chapo” Guzman was left out. The Christian Science Monitor reported Slim’s large share over the telecommunications sector has kept broadband connection costs high, and internet connectivity rates low, compared to the rest of Latin America. Also this week, Mexico’s Supreme Court ruled two common anti-gay words constitute hate speech and are not protected under freedom of expression.

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