MEXICO CITY: Mexican President Andres Manuel Lopez Obrador said on Tuesday that he will propose a constitutional change to Congress to eliminate tax write-offs, as he attempts to strengthen the country’s finances without imposing new taxes.
Speaking during his regular morning news conference, Lopez Obrador said he would share the proposal before the next legislative period begins in September.
“I will send … an initiative to reform article 28 of the Constitution so that the right to write off taxes is eliminated,” he told reporters.
Lopez Obrador’s leftist National Regeneration Movement (MORENA) party and its allies control both houses of Congress, but changing an article of the Constitution requires a two-thirds majority vote.
The president’s government is trying to improve Mexico’s tax take while honoring his campaign promise to not raise taxes.
The country’s ratio of tax to gross domestic product is the lowest of the 36 countries in the Organisation for Economic Co-operation and Development, according to a 2018 report.
Mexico’s tax take as a proportion of GDP was 16.2pc in 2017, compared with 46.2pc in France and 27.1pc in the United States, the OECD study said.
In May, Lopez Obrador pledged to end tax forgiveness for the country’s largest companies, likening the tax breaks they enjoyed to “white collar theft.”
Meanwhile, lawmakers from the president’s party are preparing proposals to tax purchases on digital platforms such as Amazon, Uber and AirBnB. The new revenue would help offset reductions in state oil company Pemex’s tax burden.