Effective Rates Are "Foolish" of the SAT

Tax Partner Mario Barrera was interviewed about the differences between profit and revenue tax and the Mexican Tax Administration Service's recent publication of effective income tax rates in the country. He noted that large taxpayers levy taxes on profits and not on income.

"If we wanted to use an adequate parameter, since we would have to compare apples with apples and if the income tax rate taxes profits, the correct thing is to see how many taxes are paid with respect to profits," he explained. "With the base used by the SAT, it is very likely that there are wrong conclusions in which taxpayers will appear below the metric that it establishes."

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