Background on Concanaco and its Relevance
The Confederation of National Chambers of Commerce, Services and Tourism (Concanaco-Servytur) is a prominent organization representing businesses across Mexico. Led by President Octavio de la Torre, Concanaco plays a crucial role in advocating for policies that support the growth and stability of small and medium-sized enterprises (SMEs), including family businesses. These businesses are vital to the economic fabric of neighborhoods, localities, and urban centers.
Concerns Over Proposed Local Tax Increases
As approximately 16 federal entities push for increasing local taxes, including the Payroll Tax (Impuesto Sobre Nómina), Octavio de la Torre, president of Concanaco-Servytur, has expressed concerns that raising local taxes and fees on the formal economy could lead to reduced investment, fewer formal jobs, and increased cost burdens for families.
Preliminary Internal Consultation
Concanaco conducted a preliminary internal consultation with camera presidents to identify vulnerable sectors and potential impacts on local economies. The results indicated that more than half of the respondents identified the Payroll Tax (ISN) and property taxes (predial) as their primary concerns.
Balancing Revenue Needs with Economic Impact
De la Torre acknowledged the legitimate need for states and municipalities to secure resources for their functions. However, he emphasized that increasing local taxes and fees on the formal economy without a parallel strategy for improving efficiency, simplifying processes, and implementing an inclusive policy to expand the tax base and encourage more individuals and businesses to formalize should not be pursued.
Existing Cases of Tax Increases and Adjustments
De la Torre highlighted that there are already detected cases of tax increases and adjustments in various states, with variations ranging from moderate to high. These changes impact operational costs, compliance, and consequently, prices and hiring.
Tax Discussion: Balancing Revenue Collection and Fairness
Concanaco’s president stressed that the local tax discussion should not be framed as a dilemma between collecting revenue or not, but rather how to collect it more efficiently and fairly. This involves boosting productivity, strengthening trust in institutions, and creating conditions for more economic activities to transition into formal schemes so that the cost of supporting governments does not always fall on those who already comply.
Concanaco’s Efforts to Protect Formal Employment and Family Businesses
Recognizing the international context and the need for certainty to sustain investment and consumption, as well as ongoing government renewals and public priority setting in various entities, Concanaco is actively working with local chambers to develop a plan for strengthening institutional dialogue with local legislators, municipal authorities, and state governments.
Key Questions and Answers
- What is Concanaco? The Confederation of National Chambers of Commerce, Services and Tourism (Concanaco-Servytur) is a prominent organization representing businesses across Mexico, advocating for policies that support the growth and stability of small and medium-sized enterprises (SMEs), including family businesses.
- Why are local tax increases a concern for Concanaco? Concanaco is worried that raising local taxes and fees on the formal economy could lead to reduced investment, fewer formal jobs, and increased cost burdens for families.
- What sectors are most affected by proposed tax increases? More than half of the respondents in Concanaco’s preliminary internal consultation identified the Payroll Tax (ISN) and property taxes (predial) as their primary concerns.
- What is Concanaco’s strategy to address these concerns? Concanaco is working with local chambers to develop a plan for strengthening institutional dialogue with legislators, municipal authorities, and state governments to protect formal employment and family businesses.
