„The growth of the Mexican market is subject to its strong government taxes“

“The potential of growth of the games and draws industry in Mexico is subject to the fee of the government taxes plus special taxes,” said executive president of the Group of Economists and Associates (GEA), Mauricio González.

“For each percentage point of additional government tax in the gaming industry, we would be reducing the growth potential of this industry in a similar proportion”, indicated in its participation with licensees of the games and draw sector. Besides, this fiscal situation of the industry is encouraging around one point and a half the growth of informal game”, he said.

Businessmen of the industry have to pay IETU or ISR on profits, VAT, rights to the Department of the Interior and, in some cases, regional taxes, as well as a special taxo f 20% on production and services, which was established in the last tax reform.

Besides, worldwide competence has increased the amount of prizes granted, because the user is extremely sensitive to prizes. “It reduces the margins, the business operation; a high efficiency is required and, no doubt, the fiscal tax may be hard,” said President of the Association of Games and Draws Licensees (APJSAC), Alfonso Pérez Lizaur.

PricewaterhouseCoopers (PWC) estimated that, at the beginning of this decade, the games and draws industry would have incomes for USD 80 billion; by the end of the decade, it is estimated that the market could have an income of around USD 125 billion. In Mexico, this sector could represent a 0.4% or 0.5% of the Gross Domestic Product (GDP), according to GEA.

Just the main actors of the industry, among them, Corporación Interamericana de Entretenimiento (CIE), Grupo Televisa and Grupo Caliente, have invested around USD 1,500 billion in Mexico and generate around 35,000 employments.

The Chief of the Income Political Unit of the Secretary of Finances, Juan Manuel Pérez Porrúa, invited licensees to talk to federal representatives and negociate a reduction of the 20% in the special tax. However, he warned that, many times, instead of having a reduction, they could have a higher tax. He also considered that there wouldn’t be any representative to talk in favor of the industry.