VAT standardization debate continues to raise questions

What alternatives are viable for increasing income?

VAT standardization debate continues to raise questions

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The solitude in the National Palace

The days continue and the national landscape changed from being “Mexico's Moment” to “The Mistake's Moment” with the return of the political party PRI in the presidential chair of Mexico. President Enrique Peña Nieto and his secretaries of government and treasury, Osorio Chong and Videgaray Caso respectively, cannot seem to find the correct formula to run the government. They hold their position, but the reality in Mexico seems to prevent them from governing completely. Between poor economic decisions, natural disasters, 2013 is looking to be a grim year in the history books.

A few days ago, Luis Videgaray presented himself in senate with a confidence in his voice like he was a connoisseur, the “master mind” behind the regime, similar to Jose Yves Limantour, minister of treasury for Porfirio Diaz. He had the commitment of explaining the initiative for the Tax Reform which in essence is centralist, and pretends to drown the middle class and make citizens dependent of government programs.

We also saw the appearance of the secretary of Treasury in regards to the oppositions stance. Ernesto Cordero took the stage and started making a series of observations and notes, pretending to scald and correct Videgaray's idea, but treating him as a colleague. Meanwhile the left wing opted for keeping at bay, what they are interested in regards to the Tax Reform, is that the wealth be “redistributed”, and as their luck would have it, it meets their request. On behalf of the political party PT, Senator Marco Antonio Blasquez was able to get the secretary of treasury to tend to the businessmen of Baja California in meetings during the same session.

The solitude of Cordero

What did the Cordero say? Nearly nothing. Disqualifying nearly all of the Tax Reform initiative, he expressed himself poorly against the current state of the nation's economy. He pointed out that the political party PAN handed over a country with a future 10 months ago, however what he did not say was that it also handed over a divided country, lost and bloody. We will never hear PAN acknowledge that reality, humility is not their strong suit.

Cordero did well in observing the economic pitfalls, but he did so in half-measures: He should have also presented alternatives, suggest different routes. By not doing this in his speech, he became a biased politician, hardly technical at all. What he said was “Do not shake things up, follow the path we laid out”. That was his mistake. PAN's motto has become “change everything so it stays the same”. We saw someone ho pretended to be the national president for his party and he has done his homework to place himself there. This posture fed his followers, now that PAN has become a party thirsty for a future which it cannot find, misled by it's complex of eternal opposition.

Clearly, the economic performance of Peña Nieto's regime has not been the best, the indicators say that Mexico's economic growth will be 1.8% this year. And this could have a simple explanation: The president and his 2 main secretaries have not fully taken control of the government.

Going beyond opposing the Standardization of VAT at the border, members of PAN should propose alternatives. The party has historically defended the middle class, and got most of it's votes from the north, were a work and business mentality prevails, but unfortunately it does not offer alternatives. It is the same party which implemented SIAVE and the control of the dollar at the border. When it comes to the state of Baja California, the issue is a bit more complicated, Osuna Millan has less than 15 days left in office as governor, and Francisco Vega is still just elected governor, and does not seem to be too committed to he subject of the VAT standardization.

Meanwhile the business owners of Baja California have taken to the streets to inform society, trying to find an eco among the citizens. As well the business groups have joined together in a front line to defend their interests, they should be able to make society as a whole understand the need to participate. Let us hope that they are not simply preaching in the desert.

Until now, the legislators for PAN and PRD, alongside with the business sector of Baja California have had meetings with the secretary of Treasury, without any change being achieved. The federal governments stance is the same: Standardization is a go.

info@b1mas4.com

Daniel.Aguilar@sandiegored.com

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