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President Andres Manuel Lopez Obrador refused to promise fiscal aid to companies affected by Covid19 shutdowns. Instead, the president focused his economic response on aid programs to the poor and small businesses loans.

A Tax Revolt Threat followed.

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.

What's Mexico to Do?

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