Increases in state taxes weaken regional competitiveness and slow down the growth of MSMEs, as well as that of medium and large companies that operate in highly competitive markets, where the tax burden could determine investment decisions between states and even against other countries, stated the Employers’ Confederation of the Mexican Republic (Coparmex).
The agency noted that no entity should move towards new taxes without first guaranteeing transparency, efficiency of spending and investment in strategic needs and infrastructure.
He noted in a statement that these increases, particularly to the Payroll Tax (ISN), are discussed and approved within the framework of the entities’ 2026 Fiscal Packages.
He stated that the creation of new contributions directly affects the operation of MSMEs and the creation of formal employment.
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He explained that in recent years, entities have faced growing financial pressure caused by cuts in federal transfers, and by the increase in new responsibilities that previously belonged to the federation.
This combination of fewer resources and greater obligations has led states to seek additional sources of revenue, mainly through the creation of new levies or increases in local taxes.
Coparmex added that based on a survey carried out among its business centers, it identified that 31 State Economic Packages have been presented, of which several contemplate increases or creation of taxes.
“We identified a repeating pattern: higher taxes without a prior evaluation of the efficiency of public spending or a clear path of economic impact,” he stated.
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“We observe it in different state and municipal Fiscal Packages, where proposals to increase the Payroll Tax, the property tax and various local rights are replicated, without there being a comprehensive evaluation of their effect on competitiveness, investment and formal employment,” he added.
He pointed out that the ISN has been the main focus of increases or initiatives, a tax that directly affects formal hiring and the ability of companies to sustain their workforce.
He exemplified that in Nuevo León, studies by business organizations show that an increase in the ISN would affect 94.2% of MSMEs, generating an average increase of 6.6% in their costs, which would force almost half to raise prices, stop investments or reduce hiring.
“Any increase in this tax makes formal employment more expensive and limits opportunities for thousands of young people seeking to join the labor market,” he said.
He considered it essential that state governments first guarantee administrative efficiency, verifiable transparency and discipline in spending before promoting new taxes or increases to existing ones.
He explained that in several states Open Data standards are still not met nor are the projects to which the resources are allocated clearly explained.
He said that 27 of the 32 entities maintain ISN rates equal to or less than 3%, and that placing any state above that threshold leaves it at a disadvantage compared to other regions that compete to attract national and foreign investments within the framework of the USMCA and the supply chain relocation process.
Coparmex called on state congresses so that this year’s fiscal discussions prioritize regional competitiveness and the ability of companies to invest, innovate and generate decent jobs under an environment of security, sufficient energy and legal certainty.
He requested that state budgets prioritize quality public services, long-term infrastructure and strategic projects with a direct impact on well-being and productivity.
He also asked to further increase the taxpayer base and ensure full transparency in its use before placing new obligations on those who generate formal employment.
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