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Last updated at 15:30 BST, Monday, 09 September 2013

Mexican soft drinks tax

Summary

9 September 2013

The Mexican president, Enrique Pena Nieto, has proposed a higher tax on soft drinks to help tackle the country's serious obesity problem. Mr Pena Nieto described it as a health tax for Mexico, which has the second highest rate of obesity in the world.

Reporter:

Will Grant

Fizzy drink

Soft drinks often contain high levels of sugar

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Report

Promising that the fiscal reform was "good news for Mexicans", President Enrique Pena Nieto unveiled a wide-ranging proposal which managed to sidestep a political controversy about sales tax on food and medicine.

Those would remain unchanged, undermining a central part of the left's opposition to the reform programme. But a hike in the tax on soft drinks was included. In part, the government hope it will help tackle the country's serious obesity problem. Mexico has the second-highest obesity rates in the world after the United States.

However, the reform is also intended to deal with Mexico's weak tax revenues. The country's coffers urgently need bolstering and the intention was that long-running loopholes, which have allowed large corporations to benefit for decades, would be closed.

In particular, there were calls to impose greater taxes on the country's top earners, including the world's richest man, Carlos Slim.

However, the final document appears to have been watered down in that regard. The proposal must now be approved by Congress and the Senate, as well as a majority of Mexico's states.

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Vocabulary

fiscal

related to money, especially taxes

reform

a change which aims to improve something

sidestep

avoid something difficult

undermining

making someone or something less confident or less likely to succeed

hike

sudden and large increase

coffers

the money that an organisation has in its bank accounts

bolstering

supporting or improving

loopholes

small mistakes in law which allow people to do things they shouldn't be able to

watered down

made weaker

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