Congress continues sparring over value added tax rate

The PRI in Congress continues to press for a reduction in the value added tax rate from 16% to 15%. The PRI delegation in the Chamber is seeking to offset the loss of revenue by raising the estimated growth of the economy in 2011, increasing the forecast price of oil, and also allowing for a larger deficit. Senator Rubén Camarillo of the PAN said the tax reduction was merely an electoral ploy. Meanwhile, the PAN noted that a 12% VAT tax rate was viable if all the current exemptions (except for a limited basket of basic foods and medicines) and special regimes were eliminated. In its weekly bulletin, the Ministry of Finance warned that a cut in taxes in the current environment could put public finances at risk, leading to excessive indebtedness or cuts in vital investment spending. (Reforma 9/27, Excelsior 9/22, Hacienda 9/27)

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