I) Background
The G-6 was created with the purpose of forming an Interagency Agreement, and professional and academic participation, linked to tax in Mexico, to seek the consolidation of a more fair and competitive in this area, with recognition and leadership in the national community.
This group consists of the following bodies, all of them non-partisan and asectoriales:
- Fiscal Studies Academy of Public Accountancy, AC (AEFCP).
- Mexican Bar. Bar Association (BMA).
- Association of Public Accountants of Mexico, AC (CCPM).
- International Fiscal Association IFA Grupo Mexicano (IFA).
- Mexican Institute of Public Accountants (IMCP).
- Mexican Institute of Finance Executives (IMEF).
Also, members of the G-6 seek to formalize a relationship that promotes unity of academic and professional tax in Mexico, with the participation of the institutions more representative of the task inherent to that matter, with full respect for the positions and are divergent ideologies that each of its members, but in a constant quest to defend justice arguments and beliefs of its members, the benefit of the national tax system.
On this occasion brings us together and fundamentally, the common interest of proposing a tax scheme to improve, from a technical standpoint the Mexican tax system in such a way that allows our country to achieve the required levels of revenue.
II) INTRODUCTION
It is important to remember that our country's tax policy is an instrument of economic policy, as there are other instruments. So, talk about taxes, you talk about the economy.
So things and considering that we are fully immersed in globalization, we can then understand that entrepreneurs are not only competing with the rest of the world economic issue but also, our country is competing, among other things, his scheme fiscal.
Require it to have a tax structure that is clearly competitive in the international context, as this will allow us, on the one hand, maintain Mexican capital and on the other, attract foreign investment.
Having domestic and foreign investment, there will be employment. With investments and generate employment taxes. Having investment, employment and taxes, there will be social welfare.
That is, they generate a virtuous cycle that our country needs.
Conversely, it creates a vicious cycle that, in addition to not generate the revenue that the country needs much damage the development of our society.
Considering the above, the G-6 we are concerned that Mexico today does not have a tax scheme that is efficient. Indeed, as can be seen on page 407 of the Global Competitiveness Report 2009 to 2010 prepared by the World Economic Forum (World Economic Forum) in Section 4.6 Scope and effect of taxation, which analyzes the impact is the level of taxes in 133 countries on the incentives to invest in, Mexico is the remote location 91.
Moreover, the Federal Executive has recently acknowledged that "... the current structure of our tax system is, in some cases, complex and expensive for both the taxpayer and the tax authority" ...
In turn, international organizations such as the World Bank warned that the aforementioned complexity causes taxpayers to devote more time to fulfill their tax obligations compared to other tax systems.
In addition to the above, also concerned that some of the tax reforms proposed and approved for 2010 is being generated that our tax system is even less competitive than the above studies reveal.
Specifically we refer to reforms such as:
- That the various reforms that were made had as main objective to achieve greater tax revenue, primarily from (some exceptions), 40% of participants in economic activity are within the formal economy. There are no major proposals to fight the other 60%, according to the Organization for Economic Cooperation and Development (OECD) is in the informal sector.
- The increase in the rate of income tax (ISR) of 28 to 30% both for corporations as for individuals, including the increase that the latter is in the intermediate sections of the tariff.
- The shoulder of the consolidation regime for tax purposes, effective "retroactive", which meant that the taxpayers involved have had to pay in 2010 suddenly exorbitant amounts that were not covered.
- The maintenance of the flat tax with modifications that made it more "aggressive" and less "additional" income tax, which also threatens their accreditation abroad.
- Starting in 2011, a scheme of tax for interest received by individuals, tax collection predominantly features that desinsentivar the capital to be maintained in Mexico and, further, that return to our country in the Mexican capital abroad.
- The failure to exclude the mechanism of the IDE to the formal economy.
- The reforms to the Federal Tax Code that gave excessive powers to the tax authorities and, in some cases, excessive penalties imposed on taxpayers.
The strategy then is simple, Mexico needs to do what is necessary to have a tax scheme that is competitive in the international context in order to generate more investment, more jobs, more taxes and thus, more social welfare.
III) DIAGNOSIS OF THE STATE FISCAL
Our country urgently needs to achieve levels of recovery of 16 to 18% of GDP to meet the obligations that must take up the state.
Historically we have not raising levels exceed approximately 10% of GDP, despite the fiscal reforms that are made each year.
This level is very low, considering that the average recovery in the countries of the OECD is 25% and in Latin America is 15%.
An important part of this situation is explained by the fact that Mexico has an economy that according to the OECD has already reached levels of 60% of participants in the economy.
Whether this phenomenon is not growing and are taking steps to contain and reverse.
In turn, the main source of revenue has come to be by way of ISR, occupying a second VAT reverse profile maintained by countries with which we compete and have proven successful in raising the issue.
On the other hand, the major tax collection effort comes only from the Federation, because the States have come to be only recipients of the shares of this are, without having assumed the responsibility to make their own collection efforts.
Compliance with tax laws in Mexico is complex, so that to comply, taxpayers must allocate a significant portion of its human and financial resources, which creates a high failure by many.
IV) PROPOSED SETTLEMENT
To improve the collection at these levels, we need to have a tax scheme that is effective and competitive in the international context, as explained previously.
That Mexico is competitive means offering a scheme that approaches, equals or fiscal outstrip supply in countries with which it competes.
These countries are now offering, drawings in which:
- Spending taxes (indirect taxes) are the foundation of the collection.
- Income taxes (direct taxes) are relatively low, and
- Not kept or maintained few estate taxes. To achieve this we require then incorporate our tax scheme premises such as:
IETU.
Must be eliminated by virtue of that at the time of its existence has not reached the goodness that is argued to justify its creation and not be creditable overseas would create a significant additional expense.
ISR.
Rates should be reduced to international standards and open rates that are not immediately reach the highest rates.
MINIMUM TAX.
There should be a complementary minimum tax calculation easy, as the alternative minimum tax in the United States.
IVAGENERALIZADO.
It's an efficient way of doing this indirect tax and Logar is the way it reaches its maximum potential revenue.
EXTENDING THE BASE OF TAXPAYERS.
Must comply with the constitutional mandate that ALL Mexican tax capacity contributed to the spending.
EFFECTIVE COLLECTION BY STATES AND MUNICIPALITIES.
It is now imperative that each of the three levels of government collects its own taxes, under the powers provided for it. Today the state collects on average only 10% of total income they receive.
Fiscal stimulus.
Must adopt a strategy of real long-term fiscal stimulus, which now suffers, that actually spark the domestic and foreign investment and employment and savings.
Preferential regimes.
It is imperative to give a sense of fairness, therefore, very urgent considering the elimination of preferential arrangements that have no real economic or social justification, in order that all taxes on the same basis.
Simplification of the tax provisions.
From the times of Adam Smith emphasized the importance of the tax provisions were easy, simple compliance.
That is why it is urgent to seriously simplify the tax provisions, so as to facilitate its compliance and reduce excessive administrative burdens imposed on taxpayers.
Legal certainty.
It's a huge demand of the whole population to strengthen the legal security in our country, through the issuance of rules as well as being clear and easy to conform to the current constitutional framework.
Legal certainty is a necessary condition to facilitate tax justice and to attract domestic and foreign investment.
RETENTION OF TAXATION.
It is very important to give permanence to established rules and tax schemes, so that taxpayers are in a position to plan in the medium and long term.
It is really very serious too often are changing the "rules".
TAX CULTURE AND RESPECT FOR THE LAW.
It is essential to maintain a culture in our country, a tax awareness, most notably from the classrooms attended by the younger generation.
It is urgent to rescue the rule of law and respect for the laws.
INDEPENDENCE OF SAT.
Urge to give the SAT of independence, as was originally contemplated when it was created and as we see in more advanced countries.
His performance must be based on strictly professional considerations, no influence of any kind.
The experiences with other institutions in Mexico (Banco de Mexico), and support it.
V) CONCLUSIONS
Do not miss the historic opportunity now before us, to implement once and for all, tax reform that Mexico needs to meet all its commitments, but especially those that are related to social investment.
Other countries if they were able to do so and are now already reaping the fruits of these reforms.
Globalization forces us all to become more competitive, including in it to our fiscal regime in order to allow us to keep the Mexican capital and attract foreign capital needed to supplement domestic investment.
This is the way to create wealth, create jobs, generate taxes.
It is serious that not only forward, but in a sterile complacency just look at how we are surpassing other countries.
In the G-6 are confident that in the next session of Congress are taken into account and adopt the proposals as G-6 are presented.
