- G-20 compliance proposal is already helping, Videgaray says
- Mexico is seeing gains in multinational tax collection
Mexico’s Finance Minister Luis Videgaray challenged skepticism that plans to clamp down on corporate tax evasion on a global scale would have any impact, saying the measures were already producing results even before their approval.
Tax collection from multinational companies is rising by “an important amount” due to proposed changes to international rules, Videgaray said at the annual meeting of the International Monetary Fund in Lima. Finance ministers from the Group of 20 approved the so-called Base Erosion and Profit Shifting project at the meeting Friday, paving the way for its debate by heads of state in Turkey next month.
“It’s a major achievement for not just tax collection, but also equality and fairness,”
Videgaray said. “In the last 12 months, we’ve had more advances with this type of contributor than we’ve had in decades.”
The Mexican government has reached tax compliance deals with several multinational corporations and held talks with more than 20 in the past year, according to Videgaray, who said he was barred by law from identifying the companies. Mexico is cutting spending after a 48 percent slump in the past year in the price of oil, which historically has accounted for a third of government revenue. A tax overhaul that took effect last year has bolstered non-petroleum income.
In separate comments to reporters, Videgaray said Mexico’s decision to tie gasoline prices to an international benchmark next year will help limit inflation expectations. The annual inflation rate fell to 2.52 percent in September, the lowest in almost 50 years.
Videgaray also suggested that lawmakers, who need to pass next year’s revenue law by the end of this month, should adjust their peso estimate to reflect the currency’s decline. The Finance Ministry used a 2016 exchange rate forecast of 15.9 per dollar in its budget proposal last month. The peso is likely to end next year at 16.19 per dollar, according to the median forecast of analysts surveyed by Bloomberg.