The process of economic reactivation and recovery in Mexico City could be affected during 2022 by the application of the new local taxes, assured the Employers’ Confederation of the Mexican Republic (Coparmex) in the capital.
This Sunday, the capital’s business leadership rejected the proposals for the new local taxes that are included in the regulations for possible income for next year.
“The aforementioned proposals for new taxes are inopportune, contrary to the spirit of economic reactivation and incoherent with respect to the purposes expressed by the City Government itself in favor of employment and productive activity. It seems that their priority is the collection and not the reactivation ”, he indicated.
It should be noted that among the possible new taxes is the reform to article 164, to expand the collection of the Lodging Tax and establish a joint obligation to property owners to encourage the payment of said tax.
On this, the businessmen explained that the accommodation sector is not prepared for this new reform due to the effects it has had since 2020.
As of August of this year, the average occupancy for the city was 27%, well below the levels of 70% prior to the pandemic. This caused a drop in tax collection to levels less than half of what was collected in 2018 and 2019, in addition, formal jobs in the temporary accommodation sector in the prepandemic stage were 37,000 jobs, while per month As of October there are 26,000, that is to say, 30% remains to be recovered ”, he said.
Another modification proposed by the capital authorities is to article 307 TER, which implies creating a new tax on delivery services managed through technological platforms. Given this, Coparmex indicated that if this tax comes into force, more jobs could be lost.
“Many of the jobs recovered have been thanks to innovation through the use of technological platforms, through which people have been employed in small and medium-sized establishments, which they have undertaken as personal or family projects to survive. This tax is contrary to the well-being of the families of the capital ”, the businessmen warned.
The Business Center of Mexico City specified that one of the sectors most affected by this new local tax could be food preparation and service, which, before the pandemic had an occupation of 156,000 formal jobs and as a consequence of this , 49,000 workers were lost.
The Government of the capital also seeks to reform article 134 to establish a tax on artistic, musical, sports, bullfighting, cinematographic, theatrical or cultural activities, acts, events or exhibitions in a digital way.
The business organization said that this tax will also affect jobs; Before the pandemic, recreational and leisure services had 58,000 formal employees, but almost 14,000 were lost.
“If applied, they will be a new brake on the incipient and slow recovery of jobs and productive activity in the city, which shows serious lags with what is happening in the country. For example, just a week ago, the Inegi (National Institute of Statistics and Geography) realized that Mexico City is among the two worst entities in the employment rates of the Economically Active Population “, he highlighted.
Due to the pandemic, Mexico City lost 233,000 jobs, of which only 98,000 jobs have been recovered.
Block
This weekend more business organizations joined Coparmex Mexico City’s request not to apply the new tax to digital parcel applications.
Through a statement, the local Coparmex, the MX Internet Association, the National Private Transportation Association, the Mexico Fintech Association, the Mexican Online Sales Association, the National Chamber of the Transformation Industry, the Confederation of Industrial Chambers of The United Mexican States, the Mexican Business Council for Foreign Trade, Investment and Technology and the Latin American Internet Association rejected the proposal of the new local tax due to its negative impact on users and businesses.
“The new tax will increase costs for businesses, restaurants, payment platforms, logistics, last mile, home sales and online markets, among other intermediary, promoter and facilitator platforms. In the same way, it will increase the costs for the retail trade (…) it could discourage the growth of this sector that is generating a benefit for the population ”, they deepened.
The Business Center of Mexico City reported that it sent to the Congress of the Capital five proposals to reactivate the economy and recover jobs.
The proposals are: to waive 12 months of the Payroll Tax for the new jobs generated in 2022, reduction to 0% of the Lodging Tax, reduction to 0% of the tax on the performance of shows, combat the under-exercise in the expenditure of the mayors’ offices and create a budget reallocation program (for tourism promotion, support for MSMEs and training programs for employment).
“The proposal seeks to eliminate the lodging tax during the year 2022, having an impact on the loss of collection of approximately 345 million pesos, but offset by the recovery of formal jobs, product of campaigns and the establishment of the tax the following year. “, Held.
Reference-www.eleconomista.com.mx