Monday, March 4, 2024

No incentives for business; instead, conditions favorable for investors

There will be no tax incentives for business when the next federal administration takes office, says the proposed chief of staff of president-elect Andrés Manuel López Obrador.

Instead, the new government will prioritize making savings and generating conditions that are favorable to investors, Alfonso Romo said.

Speaking after a meeting with the leadership of the influential Business Coordinating Council (CCE), Romo added that the government’s position wouldn’t be inflexible throughout its six-year term.

“Once we have the house in order, then we can speak. If there is an emerging plan, we’ll speak about it with the Business Coordinating Council,” he said.

Among the tax incentives implemented by the current government are a stimulus scheme to alleviate the burden of the excise tax on gasoline and a capital repatriation initiative that allows both individual and business taxpayers to bring funds generated by overseas investments back into Mexico at a lower tax rate.

However, the private sector has requested the introduction of more incentives, such as the ability to deduct employee benefits from tax payments, an investment tax deduction scheme for medium-sized businesses and a reduction in income tax.

Romo said that before the incoming government designs its tax package, it will conduct an analysis to determine what it can and can’t do but said that cutting debt and deficit would come first and that the López Obrador-led government would be “very austere.”

The president-elect has previously said that his administration will review energy sector contracts but Romo stressed that the review would extend across all government secretariats.

“There will be a detailed analysis of where we are and based on that the cabinet will coordinate the new budget. The Secretariat of Finance will bring it together and from that we’ll see how much room for maneuver we have,” he said.

For his part, CCE president Juan Pablo Castañón said that an agreement had been reached to hold 12 roundtable discussions with the incoming government during the transition period to look at ways to promote investment, certainty and employment.

He said the CCE will meet with the future secretaries of economy and labor, Graciela Márquez and Luisa María Alcalde, to discuss issues relevant to their roles, as well as the prospective interior secretary, Olga Sánchez Cordero, and the president-elect’s nominee for the economy portfolio, Carlos Urzúa.

López Obrador and his cabinet will be sworn in on December 1.

Source: Milenio (sp)

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