SHCP begins negotiations with businessmen to increase VAT and lower Income Tax


SHCP begins negotiations with businessmen to increase VAT and lower Income Tax

Businessmen from the private sector are negotiating with the Ministry of Finance and Public Credit
(SHCP) a modification to the fiscal framework consisting in reducing the Income Tax (ISR) and to
increase the Value Added Tax (VAT).
Manuel Herrera Vega, president of the Confederation of Industry Chambers of Mexico
(CONCAMIN), said that these changes to the tax regime are necessary to preserve competitiveness
in the face of the recent changes made by the United States of America.
The increase in Sales Tax has been a recurring theme for businessmen before, “They have to
analyze different perspectives. Analytical discussions with many specialized tax experts in
coordination with the Ministry of Finance and Public Credit have taken place, however there have
been no concrete proposals, nonetheless there has been talk about Sales Tax and assessments on
how to make Income Tax competitive, but there are no concrete proposals ", Herrera said.
It was specified that, in fiscal matters, the "Agenda México, Mejor Futuro" and the private sector
consists mainly of two items: a profound analysis of the tax system and short-term changes.
“There has to be a very complete, immediate and competitive response to be on par with the
United States and in the future, now that a new Federal Government is coming into power, a new
tax reform has to be implemented which would set the legal framework to be more competitive
and boost economic growth, "he said.
A thorough analysis should be carried out in relation to the new fiscal system that will be
implemented with the new government, as explained at the “5to Evento Magno Campeche 2018
de la Confederación de Cámaras de Comercio, Servicios y Turismo.”
The private initiative aims to seek a more equitable tax system to combat the informality that is
reflected in 57% of the country, a situation that is exacerbated in the southeast, where it reaches
up to 70%.
"To be able to make sure that every day more people pay their taxes in our country and have a
higher income, but at the same time be very competitive for the attraction of investments and
boost economic growth" he said to be one of the main objectives.
It is necessary to maintain public finances with debt equivalent to less than 40% of the Gross
Domestic Product (GDP), furthermore, it is equally necessary to create an autonomous National
System of Research, Innovation and Development to achieve investment equivalent to 1.5% of
GDP which currently stands at 0.6%.

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