“If I want to make my grocery store through an app, it will be 2% more expensive, because I don’t think large companies are going to absorb that tax. And what is going to happen? That a delivery man is going to come and bring it. There the infrastructure of Mexico City was taken care of and the same thing will happen if I speak by phone to the supermarket and ask for my super, but the tax will not be charged, because a digital platform will not be used, “said Karla Ortiz Macías, of the national board of directors of the National Association of Business Lawyers (ANADE) during the forum Digital Law Dialogues.
Specialists in tax and digital law agreed that the wording of article 307 TER that the city government proposed to add to the Tax Code Local is confusing and can lead to violations of various constitutional principles, such as proportionality and equity. The article, they said, does not define precisely what is the infrastructure on which the city seeks to charge the right of use; In addition, it affects different taxpayers differently and violates Mexico’s adherence to the two-pillar solution to establish a minimum tax at the global level.
The government of Mexico City, led by Claudia Sheinbaum, proposed as part of its Economic Package for the year 2022 the addition to the local Tax Code of the article 307 TER, whereby 2% of the “total amount (of sales) is charged, before taxes, for each delivery of individuals or legal entities that operate, use and / or administer applications and / or computer platforms for control, programming and / or geolocation on fixed or mobile devices, through which users can contract the delivery of parcels, food, provisions or any type of merchandise with delivery in the territory of the capital ”.
The capital authorities have insisted that this charge it is not a tax or a contribution, but a right for the use of the infrastructure supposedly carried out by courier and parcel companies that operate through technological platforms. Several industry associations and lawyers have warned that, as the proposal is written, this exploitation is more about a tax on e-commerce companies for using the streets of the city to transport their goods.
If he walks like a duck and squawks like a duck …
“If it looks like a duck, it walks like a duck, it squawks like a duck, it is the color of a duck, it tastes like a duck, because it is a duck, no one can lie to us,” said Israel Santos, a researcher at the Institute of Legal Research of the UNAM, about the dilemma on whether it is a tax or contribution or the right for the use of a public good.
Jorge Álvarez, president of the Local Tax Commission of the Mexican Academy of Tax Law, agreed with Santos in this regard, as he said that the city government’s proposal is about a local contribution disguised as exploitation.
Why is the government of the Mexico City Do you want to pass a tax for a right to use the infrastructure of the city? According to specialists, for two reasons. The first is that the concept of a right of use is more difficult to combat before the Judiciary. The second reason is that, if it were a tax, this tax would go against Mexico’s commitment to 136 countries to harmonize the tax structure of the digital economy globally.
For Leopoldo Reyes, coordinator of the Electronic Tax Law Committee of the Mexican Academy of Computer Law (AMDI), if you want to determine if the CDMX Government’s proposal is about a right to use or one local tax It is necessary to observe that when an individual is allowed to exploit an asset in the public domain to obtain a profit, it is necessary to review what is the relationship between the investment made by the State in order to create that infrastructure and what will be the correlative profit that the individual will have with the exploitation of said good in the public domain.
“An analysis is not done here. It is not properly specified what is the infrastructure that could be being concessioned to the individual so that he can use it and exploit it, “said Reyes, who added that the lack of this analysis violates the principle of proportionality established in the Article 31 section IV of the Mexican Constitution.
Global single agreement
Israel Santos, from Institute of Legal Research of the UNAM, believes that Mexico City lacks the competence to introduce a tax like the one it has proposed. According to the researcher, since 2013, the group of the 20 largest economies in the world (G20) and the Organization for Economic Cooperation and Development (OECD), of which Mexico is a part, are seeking a consensus to make large companies pay taxes where they have a market share.
Santos explained that Mexico made the commitment not to establish new contributions, taxes, restrictions or tariffs, to record the digital economy. The Claudia Sheinbaum government’s proposal would therefore disrupt the National Fiscal Coordination System, as it would be “turning around” a commitment that Mexico assumed as a country before 136 other countries.
Domino effect in other states
For Karla Ortiz Macías, of the national board of directors of the National Association of Business Lawyers (ANADE), another of the effects that the proposal of the CDMX Government is that it is replicated in other states of the Mexican Republic. He said that, as has happened in other cases such as environmental taxes, other states will turn to see the Mexico City proposal as a way to raise more money for their governments.
I think there would be a domino effect like the ecological taxes, which in this case began in Zacatecas and have been taking place in other states of the Republic, ”he said.
The problem of this possible domino effect, according to Julio César Vega, general director of the Internet Association MX, is that while in Mexico City the demand for parcel and courier services would allow companies to maintain the viability of their operation in most areas even with the collection of the new tax, in other locations this might not happen.
“If it is intended to replicate in any other federal entity, it is likely that what happens is that there is no one to charge, because there will be no platforms that endure a domino effect,” he said and added that this tax proposed by the Government of The city will benefit the largest companies, since they are the only ones that will be able to absorb the tax, thereby consolidating their operations by expelling other smaller platforms from the market that will not be able to absorb this new burden.
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Reference-www.eleconomista.com.mx