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13 Apr 2020

Financial Times

Mexico: Four states reject President´s economic response to the COVID-19 crisis and call for new tax deal

“Four Mexico states call for new tax deal with López Obrador”, 12th April 2020

…The governors of four prosperous Mexican states have called on President Andrés Manuel López Obrador to revise a four-decade-old tax pact in a rebuke to his leadership just as coronavirus threatens a crisis in Latin America’s second-biggest economy.

“We’ve had enough of abuses,” said Enrique Alfaro, governor of the western state of Jalisco, days after Mexico’s powerful CCE business lobby slammed the president for ignoring proposals to mitigate the Covid-19 impact on jobs, saying he alone would be responsible if tragedy struck.

“Either [the fiscal pact] is revised and let’s hope we can do that or . . . those states among us that contribute more to the economy will have to take a decision,” Mr Alfaro said on Friday…

Edna Jaime, head of the México Evalúa think-tank, said Mr Alfaro and the governors of the states of Nuevo Léon, Tamaulipas and Colima had “seized the opportunity to challenge the president” after his coronavirus plan, announced a week ago, was widely criticised.

He is boosting social programmes and offering 1m loans to small businesses but refuses to defer taxes or take on debt to fund a stimulus…