Mexico ruling party ready to back higher junk food tax: lawmaker
By Dave Graham and Miguel Gutierrez
MEXICO CITY (Reuters) - Mexico's ruling Institutional Revolutionary Party (PRI) is ready to support an opposition proposal to increase a planned tax on junk food, the party's leader in the Senate said on Wednesday.
Last week, the lower house of Congress approved a planned fiscal reform containing a measure to impose a 5 percent tax on junk food, and the Senate is expected to approve the reform by the end of the month.
Earlier this week Armando Rios Piter, a finance expert from the leftist Party of the Democratic Revolution (PRD) in the Senate, proposed increasing the rate on the junk food tax to 8 percent.
Asked whether the PRI could back a higher junk food tax, which also aims to reduce high levels of obesity in Mexico, the party's Senate leader Emilio Gamboa told Reuters: "The PRI will undoubtedly support it."
He noted that the finance committee of the Senate still had to approve the fiscal bill, which is a key plank of a wider reform agenda spanning energy to telecommunications that President Enrique Pena Nieto hopes will boost growth in Latin America's No.2 economy.
Rios Piter estimates that an 8 percent tax would bring in 5.6 billion pesos ($431.90 million) in revenue, versus around 3.5 billion pesos under a 5 percent rate.
The PRI lacks a majority in Congress but a measure backed by at least part of the PRD is likely to pass the Senate. Any changes to the fiscal reform would mean sending it back to the lower house to be signed off again.
Lawmakers also rolled back plans to apply sales tax to rents, mortgages, property sales and school fees, while raising the top income tax rate on a sliding scale to 35 percent from 30 percent. Continued...