There are three historical moments that give legal basis to the property tax: the promulgation of the Constitution of 1917 that recognizes the municipalities and their autonomy; the reform to article 115 of the Constitution in 1982 that transferred it to the municipalities and turned it into their main source of own income; and lastly, the constitutional reforms of September 23, 1999, which granted the municipalities the power to freely administer their finances.
However, the amount collected by the country’s 2,471 municipalities is well below the maximum level of tax revenue. In addition, according to data from the Municipal Cadastres in Mexico there are 37.8 million properties, of which approximately 0.2% of GDP is collected by property tax, a relatively low figure, compared to countries such as Uruguay, which is three times higher, or Chile, which it’s four. In Sinaloa, according to the State Cadastral Institute there are around 1 million 100 thousand cadastral codes, of which the percentage of collection efficiency is around 53% -Cadastre 2016-.
Today more than ever, the municipal treasuries must be more responsible, put aside the political cost, increase their collection and make tax redesigns. But what is the tax potential of each municipality in the state? To know it, let’s start by making a comprehensive diagnosis of the property tax and municipal cadastres that face the problem of outdated registers, lagging cadastral values, absence of a cadastral viewer, the little link between the tax and cadastral register and poor collection.
On the other hand, said diagnosis must delve into more relevant and central aspects such as: its fiscal structure, its tax level -rates and bases- and its percentage of contribution to municipal spending; the annual updating of cadastral values and their fair market value; evaluation manuals and instructions; professionalization of human capital and use of technologies; and databases.
But, not everything is on the court of the government, as citizens we must recognize that the real estate and physical infrastructure dynamics developed have increased the patrimonial wealth of families and in certain cases this does not correspond to the tax contribution, which prevents the improvement of public services and the strengthening of municipal public finances.
So, if the citizen does not contribute enough or, failing that, does not want to pay and if the collection authority is inefficient in the collection, what are the alternatives to increase the participation of Sinaloans in the property tax collection process?
One of the alternatives to increase its collection is to evaluate and analyze the tax spaces, their correct tariff elements and explore new spaces in real estate, ecological, public services, procedures and services.
The fiscal elements -base and rate- of contributions continue to be, in essence, the most important resources for solving municipal public spending, which could reach up to 0.60% of GDP, if an efficient special program is applied to abate non-performing loans, with the political will to collect and not be tolerant towards those who evade paying taxes.
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