Last minute negotiations on tax package

The PRI leadership met with Finance Ministry officials to seek a consensus tax package, but no final agreement appears to have been reached. The Ministry of Finance issued a statement that acknowledged that the 2% anti-poverty sales tax—the centerpiece of the government’s original proposal to offset the decline in oil revenues—was dead because of PRI opposition. The alternative under discussion appears to be a 1% increase in the value added tax to 16%, with continued exemptions for food and medicine, and endorsing a higher deficit.  However, continued differences between the PRI governors and the party’s congressional delegation remain an obstacle. A meeting of the Finance Commission of the Chamber of Deputies was cancelled Sunday night, after being repeatedly postponed by the PRI. The statutory deadline for approving the revenue law part of the 2010 budget is October 20th.  (Excelsior 10/19, Reforma 10/19)

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