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  • Monocle’s Mexican fixes

    Posted on December 24th, 2008 chivacongelado No comments

    I'm a big fan of Monocle magazine, and was quite amused when they talked about their main tips for the Mexican government in the year to come, which I quote below:

    1. Streamline the tax system and make it easier for people to pay.
    2. Stop police corruption by hiring better-educated cops and paying them more.
    3. Create a third television network so the media is not in the hands of so few.

    Even though all are relevant and rather urgent, the first one was the one that got me thinking.  One of the things that works especially well in Finland compared to Mexico is the taxation system. 

    We might disagree on the amount of taxes you have to pay (that's a whole other discussion), but it is amazingly easy to pay them: you only give an estimate at the beginning of the year, get a tax card, give it to your employer and then taxes are discounted automatically during that fiscal year (which is the same as the calendar year). If your estimate was off the mark, you can check your pre-filled tax return the next May, and you may even get a refund the next December.  In 7 years I've never needed to ask any help from an accountant, and I've never had a problem.

    No wonder Mexican tax payment levels are lower than Botswana's compared to GDP.  Can they try to improve this for the new year?

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