Tax on delivery apps will affect businesses, delivery people and consumers: entrepreneurs

After the Mexico City government raised a tax on delivery apps, such as Uber Eats, Rappi, Didi Food, Jüsto or Amazon; Organizations and business associations rejected this initiative considering that it would generate a negative impact on thousands of businesses, distributors and consumer prices.

They considered that this represents a barrier to innovation for the capital, since it undermines the efforts to accompany the economic reactivation in a complex period such as the pandemic.

Similarly, they consider that this contravenes the federal government's policy of not creating new taxes, as well as the agreements acquired by Mexico before the OECD not to establish more taxes on the digital economy.

“The Association of Internet MX (AIMX), the National Association of Private Transport (ANTP), the Fintech Mexico Association (FTMX), the Coparmex Mexico City, the Mexican Association of Online Sales (AMVO), the National Chamber of the Industry of Transformation (Canacintra), the Confederation of Industrial Chambers of the United Mexican States (Concamin), the Mexican Business Council for Foreign Trade, Investment and , AC (Comce) and the Latin American Internet Association (ALAI) reject new tax in Mexico City for its negative impact on users and businesses”, they indicated in a position.

Read: CDMX also proposes charging tax on delivery apps

Likewise, the signatories indicated that a local tax for using the streets is unprecedented and unconstitutional; In addition, it goes against the principle of tax equality and is a measure that harms the digital economy, limiting the creation of economic and social value, which, beyond benefiting end users and consumers, greatly affects them.

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“This new tax will result in a modification to the cost structure of intermediary platforms and of thousands of restaurants, micro and small businesses, which will inevitably have an impact on the prices paid by final consumers, increasing the already high inflation and, thereby, directly affecting the pockets of Mexican families who demand these services and thousands of delivery men who have found in digital platforms a means of generating profits in these times of pandemic”, they pointed out.

In addition, they stated that costs would increase for businesses, restaurants, payment platforms, logistics, last mile, home sales and online markets (marketplaces), among other intermediary platforms, promoters and facilitators.

Similarly, the tax would increase costs for retail businesses that complement their activities or operate entirely with the support of apps or even using their own platforms, which are treated unfairly by said proposal and in general could discourage growth of this sector that is generating a benefit for the population due to all the incentives it offers coupled with the creation of new sources of income.

“The digital economy is a key sector for the economic recovery of the City. The economic and social contribution of this industry is indisputable. This sector was already one of the most important economic activities since before the pandemic. As of Covid-19, the participation of the digital economy in the Mexican economy has been much greater and with more scope,” they stated.

For all these reasons, they reiterated that the new tax will undoubtedly affect the evolution of this sector and will directly impact consumers and people who find a source of income there.

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