Tesla, a company dedicated to the manufacture of electric cars owned by Elon Musk, will arrive in Mexico under the shelter of a tax system that benefits the automotive sector since it has effective rates of 0.6 to 5.60% of Income Tax (ISR), of according to information from the Tax Administration Service (SAT).
In this sense, Tesla would have an effective ISR rate of 1 to 1.45% for the manufacture or assembly of cars and trucks, as well as a rate of 1.50 to 2.97% for the manufacture of seats for motor vehicles, according to the listings of the effective rates to large taxpayers.
That said, Tesla’s investment in Mexico could be a time for reflection to find a balance in the payment of taxes in the automotive sector.
Alejandra Macías, executive director of the Center for Economic and Budgetary Research (CIEP), commented that all companies would have to pay a 30% ISR rate; However, with the deductions they make, they end up paying much less than what is established by law and with Tesla it will not be the exception.
“It is good that there are deductions, but that the effective rate is cut in half and not 1 percent. This ‘investment will go away’ argument (with higher tax rates and fewer deductions) needs to be put to the test. There is probably a space for the SAT to earn a little more and the companies have returns”.
Macías Sánchez added that the federal government would have to make changes for all companies in all economic activities, not just the automotive industry.
“We have to think about the fact that in recent years the concentration of income is stronger and we have to go to collect from the super-rich and among them are those who can make these investments. It is a delicate issue, a balance would have to be found to be able to better implement taxes,” said the interviewee.
For the preparation of this note, the opinion of the National Network of Automotive Industry Clusters was sought, however, there was no response to the request of this medium. The network integrates more than 600 companies in the automotive sector.
local incentives
The executive director of the CIEP commented that local tax remissions would no longer have to be made for the investments that are made, especially with the high deductions in the ISR at the federal level.
In his opinion, the fact that the states do not have enough of their own income means that they do not have the freedom to choose what to do in their public policies and continue to depend on federal transfers.
“States complain a lot that they depend on federal transfers and that much of that spending is already earmarked, so they are left with few resources to carry out their (public) policies. However, the states and municipalities would have to be serving their population, not the federation,” he said.
It will detonate the industry
Guillermo Rosales Zárate, president of the Mexican Association of Auto Parts Distributors, commented that Tesla’s investment will detonate the industry as it will attract more capital.
“The investment generates an opportunity to detonate an important supply chain in the requirements for the assembly of Tesla vehicles in Mexico and that in turn is very important for new investments and the growth of employment sources related to the entire supply chain. “, said.
