MEXICO CITY President-elect Vicente Fox on Thursday appealed to Mexicans to pay their taxes and warned he would crack down on what he called loopholes that allowed the wealthy to avoid their obligations.
Reiterating a pledge to push for a sweeping overhaul of the tax system in a nation where few pay, and where the federal tax take is among the lowest of Latin America's large economies, Fox said he wanted "fiscal justice" where the rich pay their fair share and the poor are given a helping hand.
"I want to ask for your help on this issue," Fox said in a meeting with a group of women regarded in Mexico as less corruptible and more responsible than men.
Fox became the first opposition challenger in seven decades to throw the Institutional Revolutionary Party (PRI) out of power in a July 2 election.
He has vowed after taking office Dec. 1 to launch a frontal assault on the poverty that afflicts an estimated 60 million of Mexico's 97 million people. But, to do that, he needs money.
A third of Mexico's federal revenues come from oil sales and can swing wildly up or down depending on global crude prices.
The government's tax take amounts to just 11 percent of gross domestic product, compared with 17 percent in Chile, and roughly 21 percent in the United States.
Financial analysts, the International Monetary Fund and the Organization of Economic Cooperation and Development, the club of rich nations, have all urged Mexico for years to carry out a broad reform of the tax system to reduce the dependence on oil and to increase the amount of revenues the government can spend on social development.
But it is unlikely to be easy. When Fox's economic advisors first floated a proposal to extend 15 percent value added tax to medicines and basic foods currently exempt a huge public outcry was the result.
On Thursday, the rancher and former Coca-Cola executive dressed up his tax reform proposals as a weapon to address the widening gulf between Mexico's super rich and its dirt poor.
"We will see how we can ensure justice eliminating the fiscal exemptions for the rich, for the richest families in this country," said the leader of the conservative, pro-business National Action Party (PAN).
Fox, who has already warned that next year's federal budget will be austere and will have little fat for added spending on improved social services, said he would not be able to live up to campaign promises without extra cash.
"We are investing too little in our country through taxes," he said. Fox said he knew fiscal, or tax, reform would be bitter medicine to most Mexicans, but he appealed for their comprehension and trust.
"It's the only way," Fox said.
(Reuter)