Friday, April 12, 2024

Tourism organization says medical tourism sector is evading taxes

Providers of services to medical tourists are evading taxes to the tune of US $500 million a year, according to the president of a tourism-oriented umbrella organization.

Jorge Hernández, president of the Mexican Federation of Tourism Associations (Fematur), told the newspaper Milenio that medical tourism is increasing, and so too is the evasion of taxes by professionals who provide services to foreigners who travel to Mexico to undergo treatment.

Dentist talks to patient
Many U.S. citizens come to Mexico for cheaper, quality dental care. (Caroline LMUnsplash)

Health care providers such as dentists and plastic surgeons avoid paying taxes to the federal tax agency SAT by not issuing formal invoices known as facturas to medical tourists, he said. Many only issue basic receipts, said Hernández, who didn’t explain how he arrived at the US $500 million figure.

Not paying tax on income received from medical tourists allows health care providers to keep prices low.

Hernández said that authorities need to find a way to “oblige” medical professionals to issue formal invoices to all their patients. As a result of their tax evasion, it is impossible to accurately calculate how much Mexico’s medical tourism industry is worth, the Fematur chief said.

According to Patients Beyond Borders, which describes itself as the “most trusted resource in medical tourism,” the price of most major procedures performed on medical tourists in Mexico is between 40% and 60% lower than in the United States.

New City Medical Tijuana
A growing number of modern healthcare facilites, like New City Medical Plaza in Tijuana, are seeking to attract higher-end medical tourism. (NewCity Medical Plaza/Facebook)

Hernández said that the primary treatments sought by medical tourists are cosmetic, followed by dental, and that the quality of the care patients receive here is on a par with – or even better – than that on offer in the United States.

According to the state-owned National Exterior Commerce Bank (Bancomext), the industry had revenue of just over US $5 billion in 2017. Professional services firm Deloitte has cited a significantly higher figure of US $8.8 billion.

Josef Woodman, the CEO of Patients Beyond Borders, estimates that about 1.2 million Americans per year come to Mexico for medical treatment. Border cities are particularly popular with medical tourists, but foreigners also travel to places such as Mexico City and Cancún to find the affordable treatment they are looking for.

With reports from Milenio and CNN

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