The aim of the reform package, Carstens announced at the annual meeting of the National Governors´ Conference (Conago), is to wean the federal government off using revenue from the state-owned Pemex oil monopoly to fund operating costs. The government´s dependence on oil revenues has been close to 40 percent of total income.

The fiscal reforms will also seek to eliminate the 3 percent deficit the government has been running relative to the gross domestic product (GDP).

Carstens said the main strategy will be to simplify tax collection procedures and increase compliance. Mexico has one of the highest tax avoidance rates among major countries.

"We at the Finance Secretariat have been talking with a number of governors and state finance secretaries to identify the best strategies for fiscal reform," Carstens said Friday.

"Based on that input we´ve been preparing a reform to present to the president in the next few months."

Once the package gets Calderón´s okay, Carstens said, it will be submitted to Congress.

Carstens also told the governors that for tax reform to work, the general public has to be convinced that its tax money is being put to good use.

"If we´re going to propose a fiscal reform that asks the public to contribute, they have a right to ask how that money is going to be spent," he said.

While fiscal reform was the major topic at the governors´ meeting in Tlaxcala, President Calderón used the occasion to reiterate his administration´s commitment to battling drug trafficking and other organized crime.

"If we don´t re-establish order, Mexico will not move ahead," the president said.

Calderón´s request for the governors´ help in his drug war offensive was positively received.