Modifications were recently made to state laws that regulate taxes, rights, products and uses of some federal entities. The fact is somewhat atypical, since the dependence of the states on the resources transferred to them by the Federation is significant and has been so for decades. Consequently, it is not common for them to make efforts to create new contributions that generate an additional administrative burden, as well as political-electoral costs.
But what has changed and why until now are entities looking for new sources of resources? One of the most important responses is the decrease in participations and contributions that are transferred to the states. For example, according to data from the Ministry of Finance and Public Credit, from 2019 to 2020, the former were reduced by 7.2 percent, while contributions were reduced by 3.5 percent. Likewise, spending pressures, particularly in health, have been considerably greater since the start of the Covid-19 pandemic in March 2020. Similarly, there is no prospect of significant economic recovery for the country in the future. short and medium term, which affects collection and consequently federal transfers. Finally, relations between various states and the Federation (especially those that belong to opposition parties) have been deteriorating, so there will hardly be greater collaboration in the remainder of this administration. Undoubtedly, the situation described above has allowed certain states to see that it is time to take charge of their own destiny.
However, there are several tax strategies adopted by entities. Some have chosen to tax damages to the environment, while others have applied taxes on technological platforms or have simply increased the rates of existing taxes and contributions.
Mexico City, for example, through its Income Law approved charging a 2% advantage to natural or legal persons that operate through digital platforms for the distribution of parcels, food, groceries or any type of merchandise with delivery in the CDMX . In the same way, the base of the tax on public shows (rate of 8 percent) was expanded to include those that are carried out through electronic platforms (via streaming) and property managers were also added to the tax for the provision of entertainment. lodging services (rate of 5 percent).
Another example is the case of Nuevo León, where new taxes in favor of the environment came into effect this year. Through these, companies will be charged for the extraction, exploitation or use of stone materials (marble, quarries, sand, granite, slate, plaster, tezontle, among others). Likewise, it was approved to tax the emission of pollutants into the atmosphere; the emission of polluting substances that are deposited, discarded or discharged into the water; and to the emission of organic and inorganic polluting substances that are deposited, discarded or discharged into the subsoil and/or soil.
In said state, it was also approved to increase the current tax rate for casinos from 10 to 15 percent, as well as an additional right to establishments for each machine or equipment that allows the public to participate in betting games of any kind that award prizes in money or in kind. According to the state government, the foregoing is intended to obtain more resources to finance public spending. In the case of green taxes, the proposal indicates that the resources obtained would be allocated to environmental programs of the Ministry of the Environment, specifically to redeem pollution damage, reforestation, electric public transport and generate incentives for companies that invest in green processes.
On the other hand, Yucatan will charge a tax on the emission of gases into the atmosphere of certain substances generated in production processes and another on the emission of pollutants into the soil, subsoil and water generated by industrial or agricultural activities.
In turn, entities such as Chihuahua, Veracruz and Querétaro will make some changes in fiscal matters with the aim of earning more income. Given these facts, first of all, we must applaud the fact that the states are leaving their comfort zone to design and implement new taxes and contributions. In the past, their lack of initiative in this matter has been criticized, derived from the comfort that for decades has meant “stretching out their hand” and receiving federal transfers without much effort. It is time for the states, but also the municipalities through taxes such as property taxes, to dare to finance a greater part of their expenses with their own resources. Among other things, this represents an exercise in fiscal maturity that points in the right direction.
However, for the exercise to be completely successful, the new taxes must adequately define the obligated subject, the object of the tax, the base, among other issues, in order to avoid a rain of injunctions that make them inoperative. Additionally, its design must avoid affecting the economic activity of the states. Accountability must be given and taxpayers must be shown that the proceeds from said taxes will be spent as stipulated or in a responsible manner, so that they can clearly see the destination of the resources. Otherwise, the efforts will be distorted and the reluctance to comply with the obligations will grow, leaving the states with new taxes and at the same time new forms of evasion by their population.
General Director of Ethos Laboratory of Public Policies
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Degree in International Relations (ITAM) and Master in Public Policy and Administration (London School of Economics). He collaborated in the Ministry of Finance and Public Credit where he acquired extensive experience in tax policy and specialized in the analysis of tax systems in the international arena. He also worked at Fundar in the Public Budget Area, in budget transparency and accountability. At Ethos, he has coordinated work on public finances, poverty, public security and anti-corruption.