Local tax collection, key to the development of cities in the Sea of Cortez Region: Ethos

Recaudación local, clave para el desarrollo de las ciudades en la Región Mar de Cortés: Ethos.

Strengthening the company's own revenues is fundamental for the sustainable development of the municipalities in the Sea of Cortés Regionwhere local revenue collection is emerging as a key element to improve public services and infrastructure, he said. Liliana Alvarado BaenaGeneral Director of Ethos.

During his speech at the conference Financing for Urban Development: Analysis of the Specific Case of Property Taxesat the Summit 2024 organized by Sea of Cortez ForumHe emphasized that citizen involvement in the payment of taxes translates into improvements for social welfare.

"We can see it reflected in better water and sewage systems, better schools or better public safety systems," he explained.

However, he warned about the high dependence of states and municipalities on federal participations, an obstacle to financial autonomy and local planning.

"In 2023, federal participations accounted for 82 percent of the revenues of the federal entities," he noted.

Some states have been able to stand out for their tax collection capacity, such as Baja CaliforniaThe company ranks eighth in the country in terms of its own revenues. However, in the Sea of Cortés Region also include entities with low levels of revenue collection, such as Nayaritwhich ranked last in 2023 with only 403 million pesos.

At the municipal level, cities such as Tijuana, Hermosillo, Culiacan y Mexicali stand out among those with the highest tax collection in the country. However, Alvarado Baena warned about the need to analyze fiscal dynamism: while Tijuana and Ensenada experienced a 30 percent growth in 2023, municipalities such as Ahome and Culiacán reported drops of up to 13 percent.

To overcome these challenges, Alvarado Baena identifies four challenges to improve the region's own revenues:

What are the four challenges?

- Update land registry records to market price levels.
-The cadastral tables must be updated.
-The large number of actors involved in the updates means a high level of bureaucracy.
-Updating periods need to be improved and their times reduced.
-Update the cadastral tables on an ongoing basis.
-Improve processes and adapt them to new technologies to make them fast and efficient.

- That more collaboration agreements be signed between states and municipalities to assist in collection efforts.
-There must be clarity on the fees and commissions that the states will charge the municipalities for their efforts.
-Deadlines should be established for the delivery of shares so that they can plan their payments.
-That there be transparency and accountability in the amount of property taxes.

- Decrease the amount of preferential treatment of contributions.
-Preferential treatments reduce the tax burden on taxpayers, but there is also a loss of revenue.
-The impact must be calculated to determine the extent to which preferential treatment reduces tax revenues.
-To seek strategies to collect without affecting the calculations of the payments that correspond to the municipalities.

- Facilitate the payment of the Property Tax.
-There are municipalities where taxpayers must pay in cash directly at municipal offices.
-The tax audit systems must be improved with taxpayers in arrears.
-It is necessary to professionalize the officials in charge of collection and, as far as possible, to avoid rotation of officials every time there is a change of mayors.

"An in-depth analysis and timely reforms in these four areas will allow the municipalities of the Sea of Cortez Region to achieve their economic and social development goals," he said.

Francisco Cuamea: