SECTION VI.-PUBLIC FINANCE AND BANKING THE TAX SYSTEM OF MEXICO LORING OLMSTED, Mexico City The Tax Law (Ley de Ingresos) of Mexico is an authorization of those taxes which shall be legal, by virtue of this law, for the procuring of revenue for the ensuing year with which to meet the Government's expenses, for and during that period. Sometimes one or more of the resources specified are not utilized, and thus no revenue is produced from such item in the list of authorized levies. In recent years these Tax Laws have been formulated by the Executive by virtue of special powers delegated to him by Congress. In 1920 the law was thus made by the Executive. It was accompanied by a prefatory statement that such action was taken because Congress had failed to enact the law providing for the taxes necessary to cover the annual estimate of expenses. For the year 1921, also, President Obregon, by virtue of the special powers conferred upon the Executive in Treasury matters, stated that the Executive's draft of the budget sent to the House was approved and then sent to the Senate for consideration of its constitutional aspects; but inasmuch as it was not acted upon by that Chamber, and as the amendments suggested by the House also required detailed study and the time was limited, he therefore decreed that the law covering the 1920 budget should be extended to the year 1921 also. Since Congress failed to enact a new law for the year 1922, the law of 1921, with the modifications made in that year, was continued by a circular issued under orders of the President by the Secretary of the Treasury, Adolfo de la Huerta. The law for 1923 has been duly enacted by Congress and the estimates of the amount to be realized from its operation have just been approved. These accordingly are given with the law. In order that an understanding may be had of the general features of the Tax System, it has seemed best to give the law for 1923 nearly in its entirety; but some of the clauses are transposed so as to make the matter clearer. The Federal Tax Law for 1923 in the modified form mentioned above, is as follows, the matter in parentheses being observations or explanatory matter, not belonging to the text of the law: A. TAX LAW OF THE FEDERAL TREASURY FOR THE FISCAL YEAR 1923 Article 1. During the fiscal year of 1923, the federal revenues shall consist of the following imposts, duties, products and in comes. a. Import duties... IMPOSTS AND DUTIES I. IMPORT DUTIES b. Ten per cent surcharge on import duties....... (This is the old redemption of the "infalsificables" in banknotes-which have now been covered. There are practically none in the market, but as the redemption was fixed at ten per cent of their face value, and the public has become accustomed to the tax, it goes on as a revenue producer.) c. Surcharge on imports by postal service..... (This has been increased from 25% to 50% of the duties. It was originally designed to bring in an amount equal to the consular fees in the case of importation by other channels.) d. A certain per cent ad valorem, to be a surcharge upon certain specified articles.. (This is the product of certain special taxes or surcharges on imports to which special decrees have referred in their respective cases.) .55,000,000 .5,500,000 500,000 400,000 II. DUTIES ON EXPORTS a. Export duties........ b. Surcharge on exports by postal service....... (This is 25% of the regular duties.) c. Export charge or tax on national petroleum. 'Circular (This is payable monthly. The tax is determined at the close of each month and is payable during the month following. It varies with the market price of oil in New York, so that, for a clearer understanding of it, the circular issued at the end of December, 1922, is copied here. The prices are in Mexican pesos and an addition is made in the column at the right giving the equivalent in charges per barrel since the unit adopted by the Mexican government is the cubic metre.) 6,000,000 100 26,000,000 According to the provisions 3rd and 4th of the Decree of May 17, 1922, the cuotas for Dec., 1922, shall be the following: Crude Petroleum, 0.93 density....$2.557 $0.4066 Asphalt, per metric ton, pesos.... 0.25 Goods subject to export and import taxes will pay, besides, a surcharge of two per cent on the amount of such taxes, which shall be applied in favor of the municipality wherein is situated the respective customhouse. e. Tax for Navigation Patent, Matriculation and Regis- 5,000 5,000 f. Measurement fees....................... (Boats of national registration in the coasting trade, and of less than a hundred tons, are exempt from charges under this tax.) IV. CUSTOMS SERVICE a. Guard and storage... 150,000 b. Charges for inspection of animals, seeds, fruits, etc..... 5,000 C. Certifying as to the legality of foreign organizations. d. Certifying, and other acts according to dispositions in force. 5,000 e. Issuing, renewing and visé of passports in the Con sulates. Total ..... (The following extracts from Articles 3 and 4 of this law are of interest: Art. 3. The consular charges, referred to in Frac. (a) Those in section (a) according to the provisions (b) For legalizing signatures as referred to in Sec- (c) Certificates issued as per Frac. VI, Section (c) (d) For such other certificates and acts specified in (f) For visé, or renewal, in a Mexican Consulate, of passports, referred to in Sec. (e) of Frac. VI of Art. 4. The charges referred to in Art. 3 of this VII .$10,000,000 General Stamp Tax on all Documents, contracts, $20,000,000 VIII Federal surtax on all taxes received at the tax collect- (This was reduced in 1922 from 50%.) -$20,000,000 |