A proposal to introduce an inheritance (or estate) tax, as well as a tax on donations above a certain limit, looks doomed to fail.
The initiative was recently submitted to Mexico’s lower house, the Chamber of Deputies, by legislators from the Citizens Movement. Under the proposal, estates worth more than 10 million pesos would be subject to tax. A 10-percent tax rate would be applied to non-exempted assets up to 40 million pesos and 20 percent for the next 50 million. A 30-percent rate would be levied on inheritances above 90 million.
Donations would also be subject to similar taxes.
However, the inheritance tax proposal is not a priority of the incoming Morena, PES and PT coalition, which will hold a majority in both the federal Chamber of Deputies and Senate.
While president-elect Andres Manuel Lopez Obrador will need to find new sources of income to fund promised social welfare programs, he has vowed not to raise taxes during his mandate. Introducing an inheritance tax would have a negative impact on the economy, many financial analysts agree.