Monday, June 17, 2024

Citizens, businesses must change behavior, pay more taxes: Herrera

A behavioral shift is required from individual taxpayers and businesses in order to increase tax revenue, Finance Secretary Arturo Herrera said on Monday.

“We have to recognize that [tax collection] is a problem, that there are quite high levels of evasion and avoidance. We at the Secretariat of Finance [SHCP] have to do what we can to collect the taxes but citizens and businesses will also have to change their behavior,” he said.

Speaking to reporters after addressing a business forum in Mexico City, Herrera said the SHCP has to ensure that it collects all taxes in accordance with current tax laws.

Once the secretariat, of which the Federal Tax Administration is part, has improved its revenue collection practices, there will be a debate about possible changes to Mexico’s tax system, he said.

The aim of any change, Herrera said, is not only to make more resources available to the federal government but also to state and municipal authorities.

“It’s not just the federal government that lacks resources,” he said, adding that all of Mexico’s workforce must pay tax to ensure that there are sufficient funds in public coffers.

During his address to the Forbes Business Forum, Herrera said that Mexico’s tax revenue represents 13% of GDP, whereas the average for Latin America is 17%.

“If we collected about 16% of GDP, which is the level of Central America [but below] Chile, Uruguay, Brazil and Colombia . . . we would have about 750 billion pesos [US $38.3 billion] extra per year . . .” he said, adding that the money could be used to invest in infrastructure projects or to pay off public debt.

Source: El Financiero (sp) 

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