The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1921-02-02

PROTEST OIL TAX
Contest Is Started ever New
Mexican Schedule.
Law Proposed Puts Producers
at Mercy of Officials.
RUIHOUs TO THE BUSINESS
From One.FOurth to One-Third
Levy Now Provided.
Oregon Administration Plans
to Push Law Thru.

Mexico City, Feb. Formal OBJ
jections to the governments projected
law providing for the payment of oil
taxes, was presented to Adolfo de La
Huerta, secretary of the treasury, yes
terday afternoon by a committee rep
resenting the association of producers
of petroleum in Mexico. Assertion
was made by members of the COM
mittee that it was the most .ener-
getic protest yet made to the gov
eminent by the association.
The memorandum contained charges
of "subterfuge" in the designation of
the act and declaration that com
panies which export petroleum are
subject to maneuvers which can be
arbitrary on the part of officials or
the employees of the secretary of fl
nance" 1t is alleged the projected
legislation would levy upon petroleum
taxes which were exorbitant and
wholly out of proportion to the value
of the product.
Demand for Good Faith.
Declaration BY the government that
the proposed law would provide a
production tax, was denied by the pro-
test, which asserted the only portion
of oil production affected by the tax
would be that which includes crude
petroleum and its products exported
from Mexico.
Therefore, the memorandum con-
tinued, 1.-THE tax accrues on exporta-
tons of petroleum and the subterfuge
of designating this as a production tax,
should not be resorted to. Taxes which
we must pay must be established
scientifically and must embody clear
ness and good faith in order that tax
payers will not meet with difficulties.
"Exorbitant increases in the tax to
i daff
for in the proposed law. For instance,
Panuco crude petroleum would bear a
tax of Al per cent of its total value
or four out of every ten barrels; Tux
pam crude would be taxed rs per cent
or nearly three barrels out of ten, ana
fuel oil would bear 81 per cent tax, or
one barrel out of every three produced.
Such a tax would ruin any business.
Waste Is Admitted.
The oil men suggested a 10 per cent
tax on the value of petroleum exports
after expenditures incurred had been
deducted. Discussing waste of oil
wells which the Mexican authorities
have asserted amounts to more than
fifty million pesos annually, the pro-
test admitted there was unnecessary
waste which should be stopped but it
was insist ed that some waste was I'M
avoidable and should not be taxed
AS a final observation the oil men
asked for the suppression of the law
compelling oil companies to pay part
of their taxes in paper money, which
is at present virtually exhausted. 1t
was asserted that payments being
made in paper money are in reality
additional taxes.
1t was stated serni-offfcially today
the administration officials had com
bined, to push the projected law dur
ing the coming session of the Mexi-
can congress and it was declared that
President Obregon would urge spe-
cffic provision in the law stating that
article 81 of the constitution. which
would nationalize oil deposits would
not be retroactive. The president has
on several occasions declared this was
his view of article 27.