President Fox introduces controversial tax reform

The reform is aimed at boosting government revenues to fight poverty and social inequalities that plague the country. Its passage could face problems, since his party does not hold a majority.

On Monday in a television address, Fox rejected criticism that the new taxes would weigh heavily on the poor, and said the social programmes would compensate them for food and medical costs. Fox said the new program would spark investment and produce more jobs.

Compared to other countries, Mexico levies relatively low percentage of taxes, which represent only 11.6 per cent of GDP. The new plan would reduce taxes to top income earners from 40 to 32 per cent, but would close tax loopholes.

(kil/dpa)