Enrique Pena Nieto and the taxing path toward fiscal reforms

With Mexican Congress convening this month, President-elect Enrique Pena Nieto should be preparing a defense of his proposed reforms, particularly the ones that handed him top position in the Latin American state.

Enrique Pena Nieto | Image credit: en.paperblog.com

The most painful could be the fiscal ones slated for Congressional introduction. A critical snag would be for when his party fails to gather majority in upcoming legislative elections. Barring that, the fiscal front should be part of the new administration’s strategy to spur economic growth and nurture its underperforming oil and gas sector. While declaring openness for the influx of foreign-owned businesses in key industries, a series of fiscal measures should release a huge percentage of the country’s tied up energy revenues.

Enrique Pena Nieto | Image credit: theecologist.org

Enrique Pena Nieto’s camp has also been vocal about a reinvigorated business tax, which could target growing industries such as telecom, media, and construction. International competitiveness in these industries, according to claims of the Pena Nieto camp, could be coupled with a business tax aligned with global standards. This presents an opportunity for the new administration to rake in additional revenues to pump back into building a more business-friendly environment.

Such measures could either raise vigorous opposition immediately or invite eager investors. Mexico’s economy is considered bouncy of late, with modest GDP growth and a relatively surefooted finance industry. Tax reforms are always a scary bug-a-boo, but the necessary political will should unleash their good effects.

Enrique Pena Nieto | guardian.co.ukPena Nieto

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