UPDATE 2-Mexico's Calderon slams corporate tax dodgers
(Adds finance minister's comments)
By Cyntia Barrera Diaz and Patrick Rucker
MEXICO CITY, Oct 29 (Reuters) - Mexican President Felipe Calderon, battling to pass legislation to widen the country's paltry tax take, scolded big companies on Thursday for not paying their fair share.
"I am not asking companies in Mexico to pay more than what a dentist, an employee, pays. I am asking them to put in what they need to, to observe the law," Calderon said in a speech to business leaders in Mexico City.
Finance Minister Agustin Carstens said in a news conference that Calderon was referring to companies that take advantage of loopholes in current tax legislation allowing them to postpone tax payments.
As part of a larger package of tax hikes, Calderon asked lawmakers in September to change tax rules for consolidated companies and set a tighter limit on how long they can defer income tax payments.
Company executives have lambasted the president over the proposal, saying it will cost them billions of dollars.
They have also criticized the part of Calderon's proposal that would raise consumption taxes in a bid to reduce the government dependence on waning oil revenues and ward off a threatened debt rating downgrade.
But in a rebuke to tycoons in Mexico, Calderon said it was not enough to lavish money on charity events when companies were shirking their fiscal responsibilities.
Corporate charitable donations can often be partially deducted from tax bills in Mexico, where companies such as broadcasters Televisa (TV.N) (TLVACPO.MX) and TV Azteca (TVAZTCACPO.MX) and billionaire telecoms and retail magnate Carlos Slim's fixed-line phone company Telmex (TMX.N) (TELMEXL.MX) frequently sponsor charity events.
A spokesperson for Slim declined to comment.
Televisa runs an annual fundraiser to build medical centers for children while TV Azteca raises money to buy Christmas toys for poor kids. Slim's Instituto Carso assists low-income families with free or subsidized medical care.
"It is OK that they have philanthropic activities, that they sponsor sports and cultural events, that they donate medical equipment, but they need to pay (taxes) too," Calderon said.
Mexico's conservative president is trying to win support from the opposition Institutional Revolutionary Party, or PRI, to raise value-added taxes, or VAT, to help patch up a growing fiscal gap due to sliding crude oil production.
The centrist PRI and other opposition parties say raising taxes during a recession is unfair on poor families and have asked the Calderon to do more to tax companies.
Credit ratings agencies have warned of a possible downgrade of Mexico's ratings unless it acts to bolster public finances, which count on the ailing state oil industry for around a third of their funding.
Mexico's tax haul is around 10 percent of gross domestic product -- on a par with Haiti and much lower than levels in industrialized countries.
A company tax law that came into effect last year levied a flat tax on revenues to curb a practice of using accounting tactics to avoid taxes, though the flat tax rate is well below the income tax rates paid by individuals.
(Editing by Tomasz Janowski)
((catherine.bremer@reuters.com; +5255-5282-7147; Reuters Messaging: catherine.bremer.reuters.com@reuters.net)) Keywords: MEXICO ECONOMY/CALDERON
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