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Tuesday, Sept. 10, 2013

Baja Californians up in arms over proposal to raise value-added tax from 11% to 16%

       Baja Californians raised alarms on Monday over President Enrique Peña Nieto's proposal to raise the value-added tax (IVA) in border states from 11% to 16% as part of a broader fiscal reform. Raising the tax would mean that it would then be the same nationwide.

       At Tijuana's Grupo 21 meeting on Monday, the man who runs the city of San Diego's liaison office in Tijuana, Mario López, canceled his appearance, and so the group engaged in a free-wheeling discussion of the proposal instead. Accountant Mario Cordova, using the title of a Gabriel García Márquez book, called it a "chronicle of a death foretold." He said that as it is, Baja California sends the federal government more money than it receives, and has done so since the 1920s, with the exception of the decade of the 1970s.

      Baja California Gov. José Guadalupe Osuna Millán, who was in Mexico City for a meeting with National Action Party officials, told El Mexicano that the overall reform, introduced Sunday, needs to be examined thoroughly. He noted that it will benefit the poorest because it keeps taxes off food and medicine and provides funding for unemployment insurance and old-age pensions. Story on Osuna Millán (PDF).

     Business leaders predict crisis for state if value-added tax rises to 16%. Front-page story, El Mexicano (PDF). Jump.
     Colegio de la Frontera Norte researcher Noé Aarón Fuentes says increase would have a negative effect on state and send more consumers to United States to buy. Story, El Mexicano (PDF).

Update, Sept. 13: Institutional Revolutionary Party state legislator Alfonso Garzón Zataraín of Ensenada says that if the value added tax is raised in Baja California, it likely would provided more funds that the state badly needs for various programs. Story, El Mexicano (PDF).