| MEXICO CITY
MEXICO CITY Feb 12 A business chamber based in
the northern Mexican industrial hub of Monterrey said on
Wednesday it had presented 29 injunctions against a new tax
reform, highlighting the hurdles faced by the government as it
seeks to improve Mexico's weak tax revenues.
In October, Mexico's Congress passed a fiscal overhaul
pushed by President Enrique Pena Nieto that included higher
income tax rates for the wealthy as well as new levies on junk
food, soft drinks and stock market gains.
The reform aims to wean Mexico's government off the money
generated by state-controlled energy company Pemex and
also seeks to raise tax revenue by almost 2.7 percent of gross
domestic product by 2018.
The tax overhaul was one of the main strands of a larger
package of reforms that Pena Nieto's government has squeezed
through a divided Congress. The reform drive includes opening up
Pemex to foreign investment and taking market share away from
telecoms billionaire Carlos Slim.
But unlike the energy reform, which was greeted warmly by
Mexico's business sector, the tax reform was widely criticized
for not including a sales tax on food and medicine. Critics also
said it forced higher taxes on those already paying, instead of
going after the millions outside the tax system.
In a statement, Monterrey's Caintra business lobby said it
was filing the injunctions on behalf of 40 companies based in
the northern state of Nuevo Leon, a key manufacturing hub home
to some of Mexico's richest families.
Caintra said it believed the reform violated companies'
rights by limiting deductions of worker's benefits. It said
Mexico's top court had previously supported its arguments.
If Caintra wins the injunction, it could pose a headache for
the government, according to Jorge Jimenez, a Mexico City-based
lawyer at Lopez Velarde, Heftye & Soria. Other business groups
and vested interests could follow suit, perhaps even taking
their cases to the country's top court.
The injunction is a legal tool used regularly by companies
to stall, often indefinitely, unfavorable legislation or court
rulings. Carlos Slim, for example, who controls telco America
Movil, has for years used injunctions to derail
efforts aimed at making the telecoms sector more competitive.
Last week, the chief executive officer of rail freight
company Ferromex, which is owned by miner Grupo Mexico
, threatened to use the injunction, or "amparo" as
it is known locally, to fight efforts to open up the rail
Last March, Mexico approved a bill to eliminate the ability
of companies that operate public utilities to use amparos to
block regulator decisions during the court appeals process, a
move that would affect, among others, telecoms and mining
At the time, Gerardo Gutierrez Candiani, head of Mexico's
Business Coordination Council, said the law would leave
companies "defenseless" against authorities.
Mexico has the lowest tax revenue in the 34-nation
Organisation for Economic Co-operation and Development (OECD),
restricting its ability to spend on health, infrastructure and
social programs needed to boost living standards and growth.