Mexicali Mayor Norma Bustamante said the City hired private companies for tax collection of due property taxes
The City of Mexicali hired private companies tax collection of overdue property taxes, Mayor Norma Bustamante said.
According to the mayor, the companies will get paid only if taxes are collected.
The mayor told La Voz newspaper she initially refused to do so, but said she changed her mind to recover due taxes.
Companies will start collecting taxes in January.
Recently, the newspaper reported that 22 property owners filed lawsuits to avoid paying taxes after being increased by the council. Those property owners failed to pay 16 million pesos or around $800,000 USD.
In the first nine months of the year the city collected 686 million pesos or about $3.4 million USD in property taxes.
Last year, the city increased property values that led to a tax increase in several areas.
Next year the city does not plan to increase property tax rates, the mayor said.
In Mexicali, about half of property owners pay taxes to the city.
Although state law and city ordinances give authorities certain abilities to collect such taxes through property seizure the city has not historically followed such mandates.
Criticism
National Action Party State Chairman Mario Osuna hopes the hiring of private companies for tax collection does not become another failure of the National Regeneration Movement Party like water fee collector Fisamex during the past state administration.
National Action Party Council member Manuel Garcia said the mayor has not shared details about the hired companies.
Garcia said it is unclear if the city has enough staff to collect due taxes although the city has one of the highest payroll costs in Baja California.
Payroll tax
After Governor Marina Avila enacted legislation that increases payroll taxes, private companies are expected to file lawsuits in the coming future.
National Industry Chamber in Mexicali President Alberto Sánchez Torres told La Voz newspaper that although lawmakers assured the 1.25 percent tax increase will affect companies with over 50 employees the additional burden limits business growth and could make investment flee.
The business leader also considered the payroll tax raise unconstitutional.
Sánchez Torres said companies that file lawsuits against the state are very likely to prevail in court.
This could lead to an impact on state coffers, Sánchez Torres said.
The chamber president said business owners suggested filing class lawsuits. However, a decision was made to file lawsuits individually.
Sanchez Torres considered the state had other options to increase revenue instead of raising payroll taxes that are already one of the highest in Mexico.
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