Mexican lower house committee OK spending budget

MEXICO CITY, Nov 16 (Reuters) - The lower house budget committee of Congress on Monday approved the spending portion of the 2010 budget ahead of a decision by credit agencies on whether to downgrade Mexico's sovereign rating.

A final vote on the bill was expected later on Monday.

Lawmakers had approved the income side of the plan last month, a watered-down version of President Felipe Calderon's original fiscal overhaul package to boost tax collection and cut dependence on Mexico's waning oil industry.

They agreed to raise the value added tax rate, or VAT, to 16 percent from 15 percent and increase the top income tax rate to 30 percent from 28 percent. Other tax hikes on beer, cigarettes and telecommunications were also approved.

There is lingering concern on Wall Street, however, that these measures may not be enough to make up for tax revenue from plunging oil sales.

Standard & Poor's and Fitch Ratings recently told Reuters that they needed to see a final budget before deciding whether to make any changes to the country's sovereign rating. (Reporting by Miguel Angel Gutierrez and Cyntia Barrera Diaz; Editing by James Dalgleish)