Background on the Issue
Ricardo Monreal Ávila, the parliamentary leader of Morena in the Chamber of Deputies and president of the Junta de Coordinación Política de San Lázaro, clarified that Mexico City’s mayor and head of government Claudia Sheinbaum does not have the authority to reverse the tax on violent video games as outlined in the 2026 Income Law.
Context on Claudia Sheinbaum
Claudia Sheinbaum Pardo is a prominent Mexican politician who serves as the Head of Government of Mexico City. As a member of the National Regeneration Movement (Morena) party, she has been instrumental in shaping policies for the capital city. Her recent statement regarding video game taxes has sparked a debate about her authority in this matter.
The Video Game Tax Controversy
In October 2022, the Mexican Congress approved the 2026 Income Law, which included an 8% tax on video games deemed violent or inappropriate for minors. The tax’s implementation has been met with criticism due to the challenges in classifying video game content as violent or non-violent.
Monreal’s Statement and Key Points
In a press release, Monreal warned that Sheinbaum’s announcement to not enforce the video game tax due to classification difficulties would create a “legal problem.” He emphasized that the tax is a legally established obligation and not merely an estimate in the Income Law.
- No Executive Power to Suspend Valid Laws: Monreal stressed that the executive branch cannot suspend a validly enacted tax, even if they deem it inadequate.
- Lack of State Classification System:
- The absence of a state-run video game classification system does not exempt taxpayers from their obligation.
- The legal principle of taxation requires that any tax established in law must be applied and collected.
- Legislative Responsibility: Monreal clarified that the problematic design of the taxable event (using categories like “violent,” “extreme,” or “for adults”) does not grant the executive the power to render the law ineffective. Instead, it is up to the legislature to address these issues.
Legal and Administrative Solutions
Monreal suggested that if the executive deems the tax unworkable, the constitutionally correct approach would be to seek legislative modification or outright repeal, primarily in the substantive tax law that created it. An administrative alternative exists as well, such as a presidential decree for tax incentives based on Article 39, Fraction I of the Federal Fiscal Code.
- Administrative Solution: A presidential decree for fiscal stimulus could temporarily neutralize the tax collection but wouldn’t correct the underlying regulatory inconsistencies or provide long-term legal certainty for taxpayers.
- Legislative Solution: To remove the tax permanently, Congress must convene to explicitly repeal Item K, Fraction I, Article 2 of the IEPS Law and enact a complementary amendment to the Income Law to “recalibrate revenue estimates” for video games, which were projected to generate up to 183 million pesos in fiscal year 2026.
Key Questions and Answers
- What is the issue? The controversy revolves around the 8% tax on video games deemed violent or inappropriate for minors, as outlined in the 2026 Income Law.
- Who is Claudia Sheinbaum? Claudia Sheinbaum Pardo is the Head of Government of Mexico City and a key figure in the Morena party.
- Can Sheinbaum reverse the tax? No, according to Ricardo Monreal, Sheinbaum lacks the authority to reverse the tax as it is a legally established obligation.
- What are the proposed solutions? Monreal suggests either a legislative repeal of the tax through amendments to the Income Law or an administrative solution via a presidential decree for fiscal stimulus.
