Hybrid and electric cars in Mexico do not pay any tax for damage to the environment, “but it has to be charged, they continue to pollute, hybrids pollute half, and electric cars are going to pollute, maybe not at this time they are emissions, but they are going to contaminate the batteries; So, that has to come in as an externality and the tax market has to be created,” said Alejandra Macías, director of the Center for Economic and Budgetary Research (CIEP).
The collection of the Special Tax on Production and Services (IEPS) that is charged on gasoline and diesel is one of the taxes that come in this sense, since they seek to discourage automobile consumption; However, when subsidies are granted to these quotas, income is lost and ends up benefiting those who consume these fossil fuels the most, as happened in 2022.
But this year, the subsidies have been lower, thanks to the drop in international oil prices. Next year, prices are expected to remain at the same level, and considering the lack of oil revenues, the collection of the IEPS It will help the Treasury’s collection, explained Luis Miguel Labardini, a specialist in energy issues and partner at the consulting firm Marcos y Asociados.
Gasoline and diesel charge three types of IEPS, federal, state and carbon, making a contribution of 7%, as a whole, with respect to the total income of the public sector, especially the federal one, which is the highest fee, whose collection generated more than 254,000 million pesos from January to September 2024, according to figures from the Ministry of Finance and Public Credit (SHCP).
The Alliance for Tax Justice proposes transforming ownership into a green tax on car ownership. “We propose a Federal Tenure Law that allows the federal government to collect this tax in states that do not collect it. In addition, polluting emissions must be included in the calculation of the tax for high-value automobiles,” says the document Towards a progressive tax reform: 12 proposals to protect human rights, reduce inequalities and achieve sustainable development.
