Mexico’s ruling Partido Revolucionario Institucional (Institutional Revolutionary Party—PRI) announced its support on Wednesday for an opposition proposal to increase the 5 percent tax on junk food set out in President Enrique Peña Nieto’s fiscal reform plan. The tax would be applied to purchases of high-calorie foods including chocolates, sweets, puddings, potato chips and ice cream, but would not be applied to hamburgers or tacos.
Last week, the lower house of Congress approved the fiscal reform package with a 5 percent tax on junk food, and Armando Rios Piter, a Senate finance expert from the Partido de la Revolución Democrática (Democratic Revolution Party—PRD), proposed increasing the tax to 8 percent. On Wednesday, PRI Senate leader Emilio Gamboa said that his party would “undoubtedly support” the tax increase. If Piter’s plan is formally adopted, the reform bill would go back to the lower house, before being sent to the Senate for a final vote.
If the bill is passed by both chambers with the 8 percent tax provision included, the reform will contribute nearly 2.7 percent of GDP to government coffers by 2018 according to Deputy Finance Minister for Revenue Miguel Messmacher. The tax reform bill is a key part of the President Peña Nieto’s Pacto por México, a series of reforms agreed upon by Mexico’s three main political parties in 2012 that range from education and energy to security and telecommunications.