About the Business Trust, the council´s president said that there is an initiative in Congress that was sent to the "congeladora" (Congress limbo) whose first goal is to lower the payroll tax from 2 to 1 percent, although the main objective is to fully cancel the tax, which is considered as a burden for established companies and a brake on new investments.
The decision to disappear the Business Trust has been applauded by the Private Initiative of Tijuana, and is backed by other state business leaders.
Mexicali´s National Manufacturing Industry Chamber (Canacintra) president, Juan Ignacio Gallego Topete, argues that both the payroll tax and the Business Trust should disappear. "This tax is a burden on companies and therefore is an inhibitor to the growth of those that are already established, as well as for the establishment of new ones".
In Tijuana, Humberto Jaramillo, president of the Business Coordinating Council, has also asked the state government to eliminate the Payroll tax, or otherwise allocate 100% of what is collected by way of VAT to the economic development of the entity, being that it currently allocates 5%, only.
The FIDEM was created to exercise 5% of the total revenue obtained from the collection of payroll tax (1.80% payroll) in the implementation of programs and actions to support public safety, encourage social involvement in education and to strengthen commissions and councils for economic development.
The resources are used as follows: 15% of annual income goes to the development councils´ operating expenses, and the remaining 85% is distributed in economic development, educational and public safety projects.
Payroll tax represents annual revenue of approximately 1,100 million pesos, for the state government, of which 50 million are intended for the FIDEM. These 50 million pesos are distributed to: the elaboration of studies and projects; promotion programs; campaigns; training programs; scholarship programs; support programs for MSMEs; project management; public works construction; and support equipment.
The business sector has been on the fore on the subject of irregularities which lead them to…. Continue reading article here
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