UPDATE 1-Mexico gov't ready to dilute tax overhaul plan
MEXICO CITY, Oct 9 (Reuters) - Mexico's government is primed to water down parts of a proposed tax overhaul that aims to boost the country's slender tax take, the head of the ruling Institutional Revolutionary Party (PRI) said on Wednesday.
President Enrique Pena Nieto aims to raise Mexico's anemic tax take by around $35 billion by 2018, but political opposition and intense lobbying by business groups mean sections of his reform will be sacrificed to push it through Congress.
The government is ready to revise unpopular levies on private schooling and mortgages, said Cesar Camacho, chairman of the PRI.
"The PRI is ready to carry out a series of adjustments so that the fiscal reform can prosper," Camacho said. "We PRI members agreed ... to push through adjustments to sales tax on schooling, on mortgage interest payments and housing rent."
"This reform is not only necessary, it is also urgent and cannot be delayed," he added. Camacho did not say how the government would offset lost revenue.
Senior lawmakers involved in the negotiations say a planned carbon tax is also among the items due to be cut or pared back to stop the reform, which is part of a wider economic reform package aimed at boosting growth, coming to grief.
If efforts to push the bill through founder, it will curb the government's spending plans and could complicate other legislation, notably a bill to open up the country's state-run oil industry to private capital that requires significant support from opposition benches.
To compensate for reductions in the fiscal reform, various ideas have been floated, including imposing a higher top rate of tax and raising more money from stock market transactions.
Pena Nieto's tax plan has already fallen short of expectations, after he opted out of measures such as raising the tax on food and medicine that could have broadened the tax base in Latin America's No. 2 economy.