If the government focuses only on large and productive businesses, evasion turns into a subsidy for the least productive businesses and an additional burden for the most productive businesses, the study holds.
Monday, March 8, 2010
According to a McKinsey study, 70 percent of Mexican businesses with 10 employees or less, the so-called micros, pay no taxes. That figure drops to 63 percent with small and medium-sized businesses, and 48 percent for big companies. McKinsey's conclusion was that this is a direct reflection of Mexico's high taxes, but it seems as though inefficient collection is at least as much of a factor. If your tax code is not enforced, no one's going to pay taxes, whether they are 11 percent or 71 percent. This passage is also indicative of the authors' agenda: