Mexico Senate committees approve VAT tax hike

MEXICO CITY, Oct 30 (Reuters) - Mexican Senate committees have approved a watered-down version of President Felipe Calderon's proposal to raise consumption taxes in order to reduce Mexico's dependence on its waning oil industry.

The vote late on Thursday marked a partial victory for Calderon, a conservative, as it comes after lawmakers rejected his original proposal to tax currently exempt food and medicine.

It was not clear, however, if the proposed tax hike, which cleared the lower house last week, would be enough to stave off a looming credit rating downgrade.

The bill approved by the committees would raise Mexico's value-added tax, or VAT, to 16 percent from 15 percent. The draft legislation will now go to the Senate floor.

In a session that lasted late into the night, the committees also approved a bill setting the federal budget deficit at the equivalent of 0.75 percent of gross domestic product in 2010.

Calderon's original proposal asked for a budget deficit of 0.5 percent of GDP.

The bill approved by the committees early on Friday included a budget forecast that estimates Mexican crude exports will average $59 per barrel in 2010, also higher than the forecast in Calderon's original plan.

Both the deficit and the oil price estimate had already been approved by the lower house. (Reporting by Miguel Angel Gutierrez; writing by Jason Lange)