Mexico President Faces Threats of Tax Revolts in Some States

(Bloomberg) -- Mexico’s president is facing threats from some state business chambers to withhold taxes to protest the government’s refusal to provide aid to offset the impact of the lockdown, Reforma reported on Sunday.

Business chambers in the states of Tamaulipas, Durango and the beach resort of Acapulco are demanding tax deferrals, Reforma said. Mauricio Olguin, who leads Durango’s Conaco group, said his 18,000 members would stop paying all their taxes if the government didn’t provide breaks during 2020.

The protests by business groups follow complaints by governors from the states of Nuevo Leon, Tamaulipas, Coahuila and Jalisco, who claim their states’ economic activity accounts for a bigger share of federal tax revenue than they get back from government transfers.

Jalisco Governor Enrique Alfaro threatened to pull out of an agreement to provide tax revenue if the concerns of businesses were not heeded, daily El Universal reported on Saturday.

President Andres Manuel Lopez Obrador has refused to promise fiscal aid to companies affected by shutdowns as a result of the pandemic and has focused his economic response on using existing cash aid programs to the poor, as well as providing 2 million $1,000 loans to small businesses.

Data on Sunday showed Mexico has lost more than 130,500 jobs in March and some economists see the country sinking into an even deeper recession than a devastating crisis in the mid-1990s.

In a speech posted on YouTube Sunday afternoon, Lopez Obrador suggested May 10 as a possible date to begin lifting lockdown measures in the country, but would make the decision after meeting with scientists and experts.

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