Mexican Financial Reform: President Peña Nieto Proposes No Taxes on Medicine or Food

Mexican President Enrique Peña Nieto proposed a reform to the Federal Treasury against taxes to food and medicine. The proposal was delivered to Congress by the Treasury and Public Credit Ministry of the Republic.

The government decided not to raise the temper of the general population with these measures, after Enrique Peña Nieto's first State of the Union address and the much criticized intention of implementing a tax on medicine and food.

In a message addressed to the nation from Los Pinos Official Residence, Peña Nieto announced that the Flat Rate Business Tax (IETU) would be eliminated, reported Univisión.

Before being approved, the Financial Reform proposed by the Mexican President will have to pass in the Treasury and Public Credit Commissions, along with the 2014 Economic Package. According to a press statement emitted by the government, some of the main objectives of the measure are establishing a social protection network for all citizens and accelerating growth and economic stability in the country.

The Presidency of Mexico says the main characteristics of the financial reform proposal are:

Taxes

There will be no taxes on food or medicine.

Homologate the rate throughout the country.

Current preferential regimes will be delimited with the creation of an income tax law.

Establish taxes on dividends.

Eliminate the fiscal conciliation regime.

Modernize collection of rights, mining, water and radioelectric spectrum.

Facilitate Procedures

Of the cash deposit tax and the flat rate business tax.

Give more rights to taxpayers.

Introduce measures to automatize Tributary Administration Service processes.

Informal Businesses and New Businesses

A Fiscal Incorporation Regime will be established for new businesses and those wishing to migrate towards formality.

Establish a Social Security Incorporation Regime for new businesses or those wishing to migrate.

Lower social security fees for low income workers.

Against Carbon, Sodas and Pesticides

Seeks to introduce taxes on carbon and pesticides, with the objective of reducing Greenhouse Effect gases.

Fight obesity with a tax against sugary drinks.

Federal and State Public Spending

Seeks to make federal public spending more agile and control spending in states, mainly in education and health sectors.

Benefits

Create an unemployment insurance for all Mexicans.

Universal Pension

Secondary education scholarships

Infrastructure investment