During the first quarter, the collection of Income Tax (ISR) on workers, through salary withholding, was 301,567 million pesos, with which it had an annual increase of 6.5% in real terms, according to the data from the Quarterly Report of the Ministry of Finance and Public Credit (SHCP).
The data corresponding to the period January-March 2023 was higher than the 4.7% annual growth registered in the same period of 2022 and with it added 10 years with annual increases in the reported period.
Contributions from workers in the formal labor sector of the economy represented 42% of the 722.165 million pesos that the federal government obtained through ISR at the end of March.
Miguel Ángel Tavares, president of the tax commission of the College of Public Accountants, told El Economista that the increase in ISR collection for salary withholdings has to do, in part, with the detection of the authority in tax evasion schemes that some of the employers do.
“Despite the fact that there is no longer outsourcing, there are companies that, based on advice from pseudo-taxists, lawyers and accountants, advise them to pay the payroll under concepts that are theoretically fully exempt from the Income Tax Law,” said the member of the College of Accountants.
The member of the college explained that some employers register their workers under concepts such as risk insurance or compensation for early retirement so that they do not pay Income Tax.
In the 2023 Master Plan, prepared by the Tax Administration Service, it is planned to carry out inspection actions in the review of tax evasion schemes of companies that involve the so-called “payroll companies”.
Increase in SBC
The annual increase in the amount is also a consequence of the reform to the Outsourcing Law, since wage and salary withholdings are higher because employers no longer have to register workers with a lower salary than they actually receive before the Mexican Institute. Social Security (IMSS).
The Mexican Social Security Institute reported that the average Contribution Base Salary (SBC), of the more than 21.7 million jobs affiliated with the institute, was 525.3 pesos, at the end of March.
The amount this year was higher than the 472.5 pesos registered in the same period last year, according to the IMSS.
“This salary represents a nominal annual increase of 11.2%, the highest recorded in the last 22 years considering only the months of March,” detailed the social security institute.
The SHCP, for its part, detailed in its report that the growth in employment levels and the strengthening of wages favored a greater payment of IMSS social security contributions, a fact that increased the income of the public sector in the consolidated in 9,700 million pesos.
Labor reform pushes the ISR
Income Tax collection in the first three months of the year registered 722,165 million pesos, which represented an annual contraction of 4.3% in real terms.
Official data shows that ISR collection had its first drop for a first quarter since 2018. The contraction in 2023 also contrasts with the 13.5% growth seen in 2022.
However, despite the annual drop in ISR, the federal government received 52.125 million pesos more than what was provided by the Ministry of Finance.
Given this, Gabriel Yorio, Undersecretary of Finance, said that it was “thanks to the legal modifications in labor matters that have made it possible to strengthen job creation and improve working conditions. Only in March, close to 27,000 million additional pesos were generated than expected”.
ISR contraction is due to change in regulations
Gabriel Yorio explained that although there was a lower collection of ISR compared to the previous year, this is due to the change in the regulations for the definitive payment of ISR by companies.
Juan Pablo López, income researcher at the Center for Economic and Budgetary Research (CIEP), explained to this space that the companies made the payment of their declaration in March during 2022, while for this year this will be reflected in April.
“In March of last year, the authority received all the final payments. While in March of this year it received partial payments, this affected the accumulated balance (…) The above was reflected in the taxpayers who declared the ISR payment, since there were 86,298 fewer declarations”, said the CIEP member.
