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Mexico: "Green Tax" in Works To Exempt Hybrid Drivers, Penalize Owners of Bigger and Older Vehicles
MEXICO CITY — Mexico's vehicle owners soon could be paying higher taxes on larger and older vehicles — but getting exemptions from use taxes if they drive hybrids — under a bill submitted to the Mexican Congress by the Partido Verde Ecologista, or Mexican Green Party.
Taxation of vehicles has been in place in Mexico for more than 40 years. The government created it to finance part of the infrastructure needed for the Olympic Games, hosted here in 1968. Initially it was planned to be a temporary tax, but the fiscal system became so dependent on its contributions that its cancellation could never be considered seriously unless new taxes were created. Despite criticism, the tax has never been eliminated.
The proposal asks for exemptions on 2009 hybrid vehicles, and not only would these green cars evade this tax, but they would also be exempt from the general 15 percent consumption tax. The reform, if approved by Congress, would decisively promote green technologies in motor vehicles and could reduce domestic consumption of sacred oil resources.
The measure would also give relief to Mexico's powerful dealership groups, which have been complaining about the negative effect in the industry caused by the popularity of used cars imported from the United States. These groups have been pushing for government help to offset losses in sales. It is estimated that more than 1.2 million used vehicles are being imported from the U.S. every year, whereas domestic sales of new vehicles hardly surpass a million units.
Global warming is everywhere, and Mexican politics is no exception. If the Green Party proposal prevails, it would be a significant bet to reduce carbon dioxide emissions that heavily pollute the air of Mexico City. The green tax would also be a strong reference for other initiatives to modernize Mexican law toward a greener future.
What this means to you: Cleaner air when vacationing in Mexico. — Loriana Marietta, Correspondent
Taxation of vehicles has been in place in Mexico for more than 40 years. The government created it to finance part of the infrastructure needed for the Olympic Games, hosted here in 1968. Initially it was planned to be a temporary tax, but the fiscal system became so dependent on its contributions that its cancellation could never be considered seriously unless new taxes were created. Despite criticism, the tax has never been eliminated.
The proposal asks for exemptions on 2009 hybrid vehicles, and not only would these green cars evade this tax, but they would also be exempt from the general 15 percent consumption tax. The reform, if approved by Congress, would decisively promote green technologies in motor vehicles and could reduce domestic consumption of sacred oil resources.
The measure would also give relief to Mexico's powerful dealership groups, which have been complaining about the negative effect in the industry caused by the popularity of used cars imported from the United States. These groups have been pushing for government help to offset losses in sales. It is estimated that more than 1.2 million used vehicles are being imported from the U.S. every year, whereas domestic sales of new vehicles hardly surpass a million units.
Global warming is everywhere, and Mexican politics is no exception. If the Green Party proposal prevails, it would be a significant bet to reduce carbon dioxide emissions that heavily pollute the air of Mexico City. The green tax would also be a strong reference for other initiatives to modernize Mexican law toward a greener future.
What this means to you: Cleaner air when vacationing in Mexico. — Loriana Marietta, Correspondent
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