Alfonso Ramírez Cuéllar seeks to apply VAT to purchases on technology platforms; It presumes support from more legislators.
The Morenista deputy Alfonso Ramírez Cuéllar, in coordination with other legislators, plans to present a bill in Congress to tax purchases made on Amazon, Uber, Airbnb, and other platforms, to fill the revenue hole that Pemex will leave in Public finances
Ramírez Cuéllar, president of the Budget Committee in the Chamber of Deputies, said in an interview with Reuters that applying a tax to digital platforms in Mexico would help balance public finances.
“We believe that applying VAT (Value Added Tax) to purchases on platforms is the best way to do it. There are very successful experiences with this in Latin America, ”he said.
Asked if the project would cover the operations of Amazon, Uber, and Airbnb, the deputy said yes and added that it was not drafted in coordination with the government, but had the support of other legislators.
Morena and her allies have a majority in the Chamber of Deputies.
If the proposal is approved, Ramírez Cuellar said that e-commerce companies, shared transport platforms, and rental houses would be subject to the standard tax of 16% charged to other purchases in Mexico.
He added that the project will be presented during the next regular session, which starts on September 1, and hopes that it will become law at the beginning of next year. The Ministry of Finance did not respond to a request for comment.
A Uber spokeswoman said the company would continue to meet its tax obligations and would contribute to a possible tax reform in Mexico.
He added that he had collaborated with efforts to regulate the digital economy in other parts of Latin America, such as in Argentina, Colombia, Chile, and Uruguay.
Argentina last year began charging VAT on purchases made through digital platforms, including Uber. The rules there make the payment provider, instead of the digital platform itself, be responsible for withholding and paying the tax.
Ramírez Cuéllar suggested that a similar system, with payment through payment providers, could work in Mexico. An Amazon spokesman declined to comment, while Airbnb did not respond to a request for comment.
In May, Uber and other delivery companies reached an agreement with the Mexican government to withhold income taxes from drivers.
Fiscal challenge
The commission led by Ramírez Cuéllar in the lower house faces the challenge of increasing tax revenues but keeping the electoral promise of President Andrés Manuel López Obrador not to create new taxes.
That challenge was further complicated after Pemex announced a reduction in its tax burden that goes to the government for the equivalent of $ 6.6 billion over the next two years.
In line with the promises of López Obrador, Ramírez Cuéllar argued that the plan to apply VAT to purchases on digital platforms would not constitute a new tax, but something closer to a “tax reform”.
In addition to targeting digital platforms, the legislator said the Budget Commission also formed a working group that is exploring how to properly collect taxes from companies for their use of water, including Coca-Cola and Nestlé.
In response to a Reuters inquiry, Coca Cola said: “In all our operations we conduct ourselves with strict compliance with the law and comply with our taxes and fees, without delays or debts.” Nestlé did not respond to a request for comment.
Source: forbes mx
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