Back to Headlines Print Version Buzz Up Stumble it Tweet it Facebook LinkedIn

Mexican President, Private Business Groups Spar Over Taxes

MEXICO CITY -(Dow Jones)- Mexican President Felipe Calderon called on big business Thursday to pay more in taxes as his administration seeks congressional backing for a series of tax increases in next year's budget.

In a speech Thursday at a chemical industry event, Calderon said it's " unacceptable ... that there are large corporations demanding that the government cut its spending, and it cuts it; that demand the government levy taxes on food and medicine for the poorest people, but when looking at their numbers, they pay on average 1.7% in taxes for several years."

The Business Coordinating Council, an umbrella private sector organization known as CCE, responded in an emailed statement.

"Companies in the formal economy pay their taxes according to the law, and the government audits them," the CCE said.

The comments from Calderon and the business sector come as the Senate debates a 2010 revenues bill that was passed last week by the lower house of Congress.

The bill includes several controversial tax measures aimed at recouping lost revenue from lower oil production: an increase in value-added tax to 16% from 15%, raising the maximum income tax rate to 30% from 28%, a 3% telecommunications tax, and a change that would require companies to pay over five years' taxes deferred under fiscal consolidation rules.

The fiscal consolidation bill, if passed by the Senate, would require corporations to begin paying in 2010 taxes deferred in previous years. Business groups argue that it would amount to making a retroactive law.

"We regret that at this difficult time for the national economy, companies, and their workers, ill-conceived, poorly grounded and retroactive measures bring about a polarization of society when the important thing is to grow, invest, and generate employment," the CCE said.

Calderon said he wasn't asking companies to pay more than others, but to "put in their share."

-By Anthony Harrup, Dow Jones Newswires; (5255) 5001 5727, anthony.harrup@ dowjones.com

  (END) Dow Jones Newswires
  10-29-091546ET
  Copyright (c) 2009 Dow Jones & Company, Inc.