Expert Insights on Changing Tax Perceptions and Implementing a Progressive Fiscal Reform
In the face of the need for increased public revenue and the stigma surrounding tax payments, various experts have emphasized the importance of altering the narrative around taxes to drive progressive fiscal reform.
Key Experts and Their Perspectives
- Mónica Unda: A researcher at the University of Southern California, Unda highlighted the necessity to not only justify tax reform but also change the narrative around taxes so that taxpayers view proposed law changes as “just.”
- Alejandra Macías: Director General of the Center for Economic and Budgetary Research (CIEP), Macías stressed that a fiscal reform must consider all the transitions the country is undergoing, including demographic, energy, technological changes, among others.
- Alice Krauzer: An investigator at the College of Mexico, Krauzer pointed out that Mexico lacks a federal wealth tax or high-income tax, which is problematic as it prevents higher-income individuals from contributing more to public coffers.
- Estefanía Vela: Director Executive of Intersecta, Vela explained that the current tax system is unjust as it favors a select few, with evidence indicating the need for progressive tax reform.
Current Tax Revenue Landscape
Alejandra Macías reminded us that although tax revenues have increased in recent years, the petroleum sector’s situation is different due to falling oil prices.
- Macías stated, “We have a flat revenue projection, which is why we need to make changes… At the very least, we should discuss significant alterations in our tax structure and reduce tax evasion and avoidance.”
Alice Krauzer further emphasized that a substantial portion of tax evasion and avoidance in Mexico occurs among high-income individuals, underlining the need for a more equitable tax system.
Tax Income Distribution and Public Spending
According to data from Mexico’s Secretaría de Hacienda y Crédito Público (SHCP), public revenues accounted for 16.3% of the Gross Domestic Product (GDP) by the end of the previous year. Of this, tax revenues represented 14.6% of GDP, while petroleum revenues contributed a mere 0.6%.
Regarding public spending, it accounted for 27% of the GDP by the end of 2024.
Key Questions and Answers
- What is the main issue experts are addressing? The need to change the narrative around taxes and implement a progressive fiscal reform to ensure fairer contributions from all income levels.
- Why is it crucial to alter the tax narrative? To make taxpayers perceive proposed law changes as just and equitable, fostering broader support for fiscal reform.
- What factors should a progressive fiscal reform consider? Demographic, energy, technological transitions, and addressing tax evasion among high-income individuals.
- How do current tax revenues compare to public spending? Tax revenues accounted for 14.6% of GDP, while petroleum revenues contributed only 0.6%. Public spending represented 27% of the GDP by the end of 2024.
