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Higher Taxes all around


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IVA will be raised from 15% to 16%, Internet and Cable 3%, Beer 26.5% increase (on production costs), 170.9% increase on tobacco, and 3 pesos per litre on spirits.

Income tax (ISR para personas fisicas) raised from 28% to 30% for those earning more than 4 times the minimum wage monthly.

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Spencer were these the final numbers the various parties agreed to? If so the peso will gain relative to US$ if only for a short time. International money markets have been waiting for this and may even take the government international loans from 3 levels above junk to a little higher. No one likes more taxes but Mexico is desperate.

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The measures seem to be about to be approved and are supposed to bring in alot of $$$. Not final yet but with a shortfall and money needed, passage seems likely.

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Mexico has little choice and is between a rock and a hard place. 60% of economy is underground. At least in the state of Guanajuato 5 cities are being targeted and SAT is literally going door to door with a 3 page questionnaire. This will continue rest of year. They are asking nationality, visa status if not Mexican, own vs rent, any income earned in Mexico, copy of tax returns where applicable etc. My landlord got hit and had 3 visits. Then a quick emergency meeting with his accountant in Celaya and now a quick trip to Mexico City for a correction of CURP number etc. This government is broke.

http://sat.gob.mx/

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IVA on food and medicines, that will hurt the poor the most, of course. I hope that doesn't pass! I don't know why they don't make the rich pay on luxury items, luxury cars, very expensive jewelry, etc. Not food and medicine, my goodness.

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IVA on food and medicines, that will hurt the poor the most, of course. I hope that doesn't pass! I don't know why they don't make the rich pay on luxury items, luxury cars, very expensive jewelry, etc. Not food and medicine, my goodness.

And all this is coming from a president with a master`s in economics.

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IVA on food and medicines, that will hurt the poor the most, of course. I hope that doesn't pass! I don't know why they don't make the rich pay on luxury items, luxury cars, very expensive jewelry, etc. Not food and medicine, my goodness.

NOT on food nor medicine instead they appear to be increasing the IVA from 15 to 16% as noted by Sencer. Income tax from 28 to 30%. With a 60% underground economy and a huge recession Mexico financially is in rough shape.

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Mexico has little choice and is between a rock and a hard place. 60% of economy is underground. At least in the state of Guanajuato 5 cities are being targeted and SAT is literally going door to door with a 3 page questionnaire. This will continue rest of year. They are asking nationality, visa status if not Mexican, own vs rent, any income earned in Mexico, copy of tax returns where applicable etc. My landlord got hit and had 3 visits. Then a quick emergency meeting with his accountant in Celaya and now a quick trip to Mexico City for a correction of CURP number etc. This government is broke.

http://sat.gob.mx/

Is this a test run for Mexico City or what? At least 65 percent of the economy is generated there, you would think that would be the place to start. And event at that, the project will literally take years.

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It appears as of today that they have approved IVA to go from 15% to 16% but not on food or medicines, ISR (income tax) from 28% to 30%, and a telecom tax of 3%.

http://www.informador.com.mx/mexico/2009/147452/6/diputados-aprueban-paquete-fiscal-2010.htm

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IVA on food and medicines, that will hurt the poor the most, of course. I hope that doesn't pass! I don't know why they don't make the rich pay on luxury items, luxury cars, very expensive jewelry, etc. Not food and medicine, my goodness.

I haven't read anything or heard anything that would indicate a plan to tax food and medicines. As far as I know, that idea has been rejected.

Another important tax increase is from 2% to 3% tax on cash bank deposits over $15,000MN ($5,000MN lower than previously). Deposits by wire or as a check are not affected.

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I haven't read anything or heard anything that would indicate a plan to tax food and medicines. As far as I know, that idea has been rejected.

Another important tax increase is from 2% to 3% tax on cash bank deposits over $25,000MN. Deposits by wire or as a check are not affected.

Notice that there is no mention of reducing government spending, including the obscene salaries & perks most government officials receive. Nor are there proposals, as far as I can deduce, of trying to collect the income taxes from the underground economy.

They(Mr. Orendain) were talking today about the Tequila industry's situation-with the new taxes on liquor plus the new IVA, a bottle of tequila would cost around 150pesos, of which about 50 would go to the gov't and 100 to the pro ducers. Yikes!

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Taxation moves money from one pocket (the private sector) to another (the public sector). Nothing is achieved other than that a portion is lost through administration of the program.

It just means that bureaucrats can decide what to do with the money rather than the person who earned it.

Individuals with limited resources are much more efficient at squeezing everything they can get out of that money,compared with bureaucrats who don't care. In that sense additional taxation is bad for the economy. At this time of economic recession, every additional peso of taxes paid only serves to put a drag on the economy.

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Notice that there is no mention of reducing government spending, including the obscene salaries & perks most government officials receive. Nor are there proposals, as far as I can deduce, of trying to collect the income taxes from the underground economy.

They(Mr. Orendain) were talking today about the Tequila industry's situation-with the new taxes on liquor plus the new IVA, a bottle of tequila would cost around 150pesos, of which about 50 would go to the gov't and 100 to the pro ducers. Yikes!

On the contrary, LaChula: the government is talking about lowering salaries and putting salary caps on many government salaries. We'll see if it actually happens...

There has also been a lot of discussion of how to tax businesses that are part of the informal economy. So far, there isn't a solution.

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Remember, that this is necessary because these politicians won't confront the need to clean up and free Pemex from governmental stupidity and graft, and the gouging by the unions. A reformed Pemex would generate all the money the government would need.

Hmmm...I think that's an oversimplification of the problems and solution. It's highly unlikely that Pemex will ever be 'reformed'. It and the CFE (Comisión Federal de Electricidad) are the government's last cash cows.

Crystal ball prediction: Luz y Fuerza, now extinct, will be merged with the Comisión. Watch.

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I think they have already said they're going to merge L y F with CFE. The blind adopting the blind. :)

You missed my point. If Pemex was reformed, it would be a much better cash cow for the government than it is now. I wasn't aware that the government gets much money from CFE. Privatizing it would give it access to the capital markets so that it could start upgrading and modernizing its primitive generation and transmission equipment. But there again, the union would have to be brought to heel and the employees made to actually work and stop cheating the company.

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IVA will be raised from 15% to 16%, Internet and Cable 3%, Beer 26.5% increase (on production costs), 170.9% increase on tobacco, and 3 pesos per litre on spirits.

Income tax (ISR para personas fisicas) raised from 28% to 30% for those earning more than 4 times the minimum wage monthly.

Could you please clarify some of theses items: are beer, tobacco and spirits going up by the percentage you show or that these figures will be what the tax amount is after the increase? If tobacco is going up by 170.9% then maybe I better think about quitting!!

Mil gracias.

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Could you please clarify some of theses items: are beer, tobacco and spirits going up by the percentage you show or that these figures will be what the tax amount is after the increase? If tobacco is going up by 170.9% then maybe I better think about quitting!!

Mil gracias.

The current taxes are:

--IVA 15% in the interior, 10% along the border

--Alcoholic beverages other than beer: 50%

--Pack of cigarettes: I don't know

--Beer: 25%

The proposed taxes are:

--IVA 16% in the interior, 11% along the border

--Alcoholic beverages other than beer: 53%

--Pack of cigarettes: 10% (average, some places may be less, some more)

--Beer: 26.5%

In addition, the tax on betting and lottery winnings is proposed to go up from 20% to 30%.

If you can afford it, you can afford to pay more, right?

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Guest RevImmigrant

Hey, Mainecoons, you just said a four-letter word - Work (when it applies to government workers). This is why the Air Force calls their government civilian employees seagulls - because they squeal, squawk and ..it and they're protected by the government!

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According to this article,PRI in the Senate is opposed to the tax increase and won't support it. It's not a "done deal" until the Senate and the Prez sign off on it

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a1jSlfEYacps

The lower house which is controlled by PRI approved it and sent it to the senate. The senate which is controlled by the PRI didn't and sent it back down. Politics Mexican style anyone?

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