NOW that the Ex-Coca-cola President isn’t President…

Herald, (18 December 2006) 

A proposal to boost taxes on soft drinks in 2007 has caused divisions within the nation´s largest political parties – but on Sunday it appeared the lower house of Congress would approve the measure this week and send it on to the Senate. The bill was approved by a congressional commission on Saturday and also includes increased taxes on tobacco and cigarettes and reduces tax deductions for companies that purchase vehicles. These measures, along with the proposed 5 percent soft drink tax, have provoked protests in their respective industries.Manuel Espino, president of the ruling National Action Party (PAN), said the soft drink tax would unfairly punish the poor.

“In my personal views, I want to say that I would hope that this tax would be less or withdrawn,” Espino said at a press conference at his party´s headquarters in the capital. “I´m worried that soft drinks, while they aren´t an article of first necessity, are in fact an item that is widely consumed. A lot of people include it in their basic diet, and it wouldn´t be fair to them to raise soft drink prices through a tax hike.”

It was unclear whether Espino´s declaration would influence the vote of his party members.

REDUCING HEALTH RISKS

The proposal´s supporters argue that the sugary drinks contribute to Mexico´s rising levels of obesity and related illnesses, and could help improve citizens´ health.

If approved in the coming days by the full Chamber of Deputies, as expected, it is still unclear whether the Senate, which has the authority to modify the bill, would allow it to stand.

Sen. Rosalinda López Hernández of the Democratic Revolution Party (PRD) said her bloc was still divided over the tax, while Sen. Carlos Lozano de la Torre of the Institutional Revolutionary Party (PRI) said his faction would likely seek to repeal it, saying it would disproportionately hurt Mexico´s poor.

The proposed tobacco tax, which would gradually increment over the next three years, has wider support. Both the PRD and the PAN lawmakers in the lower house have voiced support for the provision. The PRI´s stance on the tax was still unclear on Sunday.

Instead of a tax on soft drinks, the PRI may call for mandatory warning labels on junk food and alcoholic beverages, warning of health risks.