News Summary for October 21st, 2009

++ The Chamber of Deputies Finance Committee approved the initial draft for a new revenue bill.
1. The new draft bill sets sales tax at 16 percent (currently we pay 15%) throughout the country and 11 percent on the border (currently they pay 10%)
2. Meanwhile income tax rose to 30 percent and a tax on cash deposits was augmented to three percent for amounts higher than 15,000 pesos per month.
3. A new three percent tax was set on telecommunications services including fixed telephone service, Internet and cable television.
4. Beer tax rose to 26.5 percent from the current 25 percent and cigarette tax rose to 40 cents per pack. (Comment: Yeah, I know, many of you are thinking.. Pay more for beer! Pay more for your cigarettes.. Why live??!!!!! )

++ The PAN Senate caucus explained that the tax increases are because of low tax revenue in Mexico… PAN lawmakers say business and social groups which oppose the new taxes do so because of their own interests. (Comment: Wow! Now the PAN has to defend a proposal that does not reflect the President´s bill…)

++ Concamin said the new taxes in 2010 will put a break on investment and strengthen the informal economy. (Comment: Concamin is right… Why even try to pay taxes… Especially now… More businesses are going to find ways to skirt Hacienda… Anyone bartering these days)

++ Speaking in Cancun, President Felipe Calderón said the Mexican economy is on the rise… He said that from June to the first two weeks of October, 200,000 new jobs were created, and from August to October the economy grew by nearly three percent. (Comment: Where are those jobs? Oh! I forgot, they are probably jobs in the informal economy, where they don´t pay taxes!!)

++ As for the Electrician Union-SME… Leader of the Mexican Electricians Union Martín Esparza Flores said he would return to the negotiating table with the government if the Energy, Labor and Finance secretaries take part in negotiations. But Alejandro Muñoz, Esparza Flores’ rival, said he would continue in talks with the government under the current conditions. (Comment: Divide and conquer…I believe Sun Tzu said that…)