Business Shut? Stuck at Home? You Still Need to Do Mexican Taxes
Business Shut? Stuck at Home? You Still Need to Do Mexican Taxes
(Bloomberg) -- Felipe Morales is asking his accountant to scour his books for any deduction as he prepares his annual tax filing due end of day Tuesday. Business at his two Italian restaurants in the heart of Mexico City has fallen over 70% this month amid mounting concern over the coronavirus outbreak.
“I don’t know why they haven’t launched a strategy or a fiscal stimulus,” he said. “On taxes, they’re cracking down, and we don’t know what’ll happen.”
While U.S. taxpayers have been given until July to file, Mexican President Andres Manuel Lopez Obrador’s officials have told taxpayers to hurry up and send in their checks. March 31 is the deadline for Mexican companies to file 2019 returns.
Many companies have seen revenues collapse this month as much of the country began to shut down. On Monday night, the government declared a national emergency to limit “non-essential activities” though details were still thin on how the shutdown will be implemented. At the same time, the drop in Mexican oil prices for export to below $11 per barrel is putting at risk federal income from one of the government’s main sources: state-owned oil company Petroleos Mexicanos.
On Tuesday, Mexico’s leading business group, the Consejo Coordinador Empresarial, urged the government to delay the annual tax filing deadline for six months and allow for lower monthly payments going forward, as well as other measures. The group said Mexico should heed recommendations for tax relief by the Organisation for Economic Co-operation and Development or risk widespread layoffs.
“These measures will allow companies the minimum liquidity needed in order to preserve employment,” the group known as CCE said. Taxpayers have faced “serious” difficulties with the tax agency’s information systems that has impeded them from filing on time, the CCE said.
Lopez Obrador has pledged not to increase the country’s debt, so he hasn’t budged on his views that tax payments are needed to keep the federal government afloat.
‘Tough Decisions’
Before the coronavirus crisis blew up, Lopez Obrador had launched a campaign against widespread tax evasion in Mexico, focused on bigger companies.
Mauricio Martinez, a partner at Deloitte in Mexico City, said there was no sign yet that the government would listen to the pleas from the private sector.
“Without a tax stimulus plan, a lot of businesses will soon be strapped for cash, and they will have to make tough decisions on what to pay,” Martinez said.
Felipe Morales, the restaurant owner, said he hasn’t fired staff yet, and will be able to make his tax payment Tuesday, but he doesn’t know if he will have the liquidity to make his April filing.
Upcoming monthly dues are based on earnings from the prior year even though many companies have seen revenues collapse this month.
“Relief or an extension, the government will probably end up doing something,” Morales said.
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