Billions of pesos worth of tax debt forgiven by the federal taxation administration, SAT, has met with some criticism from a civil organization dedicated to government budget and policy analysis.
Fundar claims that canceling debts amounting to nearly 600 billion pesos, about US $30 billion, has been carried out in a discretionary and opaque manner.
The organization’s findings have been published in a report called Fiscal Privileges, which says that SAT has cancelled the debts without providing any logical explanation to justify its actions, while withholding details about the individuals or businesses involved.
What Fundar was able to determine was that forgiving the tax debts has for the most part benefitted a small number of taxpayers, which it describes as “a worrying situation.”
Just in the last year, the tax authority forgave tax debts amounting to 15 billion pesos owed by 15 companies. Among them were several branches of the GEO corporation, Simec International, Industrias CH, Volkswagen, the National Polytechnic Institute (IPN) and Arnecom.
Under the law, cancelled or forgiven tax debts are those that “would be too expensive to collect, or unlikely to be paid by debtors.”
But, says the report, “It is impossible to know if SAT did try to collect the pardoned debts to the maximum extent possible.”
Fundar also found out that the National Institute for Transparency and Access to Information (Inai) has instructed SAT to release all information pertinent to the tax credits it has granted, requests that have been systematically unmet by the tax authority.
SAT has offered the justification that the federal tax code prohibits it from revealing any information about taxpayers.
Based on publicly available information, Fundar determined that writing off the debts has mainly benefitted those that owe the most.
“Tax debt pardons continue to be formulated, designed and implemented discretionally, and no controls have been put in place to guarantee pardons aren’t granted to those with greatest debts, or those who have been pardoned in the past,” said Fundar in its report.