Mexico Budget Approval Praised

MEXICO CITY — President Ernesto Zedillo praised lawmakers for approving a 1999 budget that adheres to his goal of limiting the fiscal deficit to 1.25% of gross domestic product, a spokesman said Thursday.

The lower house of Congress approved the budget without a 15% tax on phone service that the Zedillo administration initially sought. To make up for lost revenue, lawmakers adopted additional spending cuts and several revenue-raising measures, including a 5% increase in diesel fuel prices.

“Congress found a creative alternative,” said presidential spokesman David Najera. “There’s no displeasure about the telephone tax. Congress found another solution.”

Zedillo was pleased that the belt-tightening measures were spread broadly, extending to businesses as well as the government, Najera said. The government will lower the corporate tax rate to 32% on earnings that are reinvested, instead of 30% as initially proposed.

The Chamber of Deputies approved the 1999 budget spending bill early Thursday after a weeks-long standoff over taxes took the bill right up to the Dec. 31 deadline.