Mexican Congress attacks grocery coupons

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Here’s a link to my most recent article on AQBlog, titled “Mexican Congress attacks grocery coupons”

http://www.americasquarterly.org/node/2132
Date published: Jan 21st, 2011 I hope you find it interesting. Please feel free to comment.

Here’s a copy of it:

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In Mexico, most medium-size and large companies provide their employees vales de despensa, or grocery coupons, as part of their monthly benefits to workers. These were originally instituted to provide tax breaks to both businesses and individuals. The value of grocery coupons is not declared as part of one’s personal income (so it is not taxed) but in most cases, it does account for a significant amount of money. Vales de despensa are an accepted form of currency in supermarkets, gas stations and even restaurants.

Now, this week, the Diario de la Federación (Official government gazette) announced that our Federal Congress published yet more proof of their nearsightedness by issuing a new law regulating the use of vales de despensa, the Ley de Ayuda Alimentaria para los Trabajadores. As part of its undeclared war on big business (proof of which is in every recent tax reform), Congress decided to restrict the use of vales de despensa and prohibit the purchase of alcohol and tobacco with this currency (Article 12, section II).

For people with a small cash flow, this inherently means that government is making it even harder for them to exercise their free will and purchase what they please in a grocery store.  Government already has a special tax for alcohol and tobacco, which came into effect on January 1, 2011, and forced price increases in these products (transfering the tax imposition directly to customers). In cigarettes for example, this new tax implied a 25 percent price increase from one day to the next.  It is self-explanatory that the intention is for government to try to squeeze the most it can from its captive tax contributors (as opposed to actually doing something about the other 90 percent of the people who evade taxes and/or are part of the informal economy).

The “healthy diet” excuse does not hold ground, at least in the case of alcohol. Countless studies (here’s one) from international scientists have proven time and time again that in moderation, alcohol can actually make your heart stronger and improve your memory.  Obesity, caused by lack of exercise and the ingestion of junk food, and not alcohol, is Mexico’s top health concern today. If Congress wanted to be logical about it, they would have taxed certain food products including maize and corn tortillas (which by the way are part of our subsidized foods). A better physical education program in public schools would also do a lot more in favor of combating obesity than further restricting the purchase of a bottle of red wine.

More importantly, the constraint imposed on vales de despensa is an infringement on our right to exercise free will. Every worker earns the money deposited in these coupons. It is part of their pay for a hard day’s work and government should not have the power to tell them what they can and can’t spend it on.

I am not a smoker and I hate the smell of tobacco, but as long as cigarettes are a legal substance for adult consumption, I have to respect the right of someone to purchase a pack of their favorite brand using their own money. And the government should do so as well.

*Arjan Shahani is a contributing blogger to AmericasQuarterly.org. He lives in Monterrey, Mexico, and is an MBA graduate from Thunderbird University and Tecnológico de Monterrey and a member of the International Advisory Board of Global Majority—an international non-profit organization dedicated to the promotion of non-violent conflict resolution.

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