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The Impunity Index Increases in Mexico: IGI-MEX 2018

Dr. Luis Ernesto Derbez Bautista, president of Universidad de las Américas Puebla (UDLAP), presented the “National Impunity in Mexico and its Dimension, IGI-MEX 2018», a work directed by Dr. Juan Antonio Le Clercq Ortega and Gerardo Rodríguez Sánchez Lara, UDLAP professors and researchers.

«Since publishing in 2015 the first Global Impunity Index, Universidad de las Américas Puebla has stated that the fight against impunity is a key element in the strategy to fight the violence and corruption that affect Mexico.  The new IGI-MEX 2018 not only confirms the results presented in its 2015 version, but also shows that, disregarding recommendations, the authorities have allowed the level impunity in the states to increase in practically the entire country» expressed Dr. Luis Ernesto Derbez Bautista.

He also mentioned that the report offers specific data with which a program of verifiable and gradable measurements can be designed to fight the violence and corruption that plague the nation.  Likewise, UDLAP´s president stated that faculty and students of Universidad de las Américas Puebla participated in the IGI-MEX 2018, « so UDLAP reiterates its vocation for excellence in research and its social commitment to Mexico and its citizens in strengthening the Rule of Law », emphasized Dr. Derbez Bautista.

He stressed that the political parties must assume their responsibility and understand that if they want to fight corruption and violence they have to eliminate impunity, this being the only way to improve the levels of security, access to justice, and protection of human rights in our country.  It is also necessary to invest in, train, and improve the items detailed in the Global Impunity Index: «It is not a matter of who governs, the point is how to govern to define priorities and how they are implemented », highlighted president Derbez.

During his participation, Dr. Juan Antonio Le Clercq Ortega, Director of the Department of International Relations and Political Science at UDLAP, pointed out that impunity is a phenomenon that must be studied by itself – not only accompanied by security, justice, violence, and corruption – because it feeds and multiplies the effects of these problems, increasing the number of victims, aggravating problems such as graft, and even breaching human rights.

In comparison with the results of the IGI-MEX 2016, and applying the same methodology and measuring the same dimensions and variables, the IGI-MEX 2018 provides the following conclusions

  • States with Increasing Impunity. These states increased their impunity index by five points or more: Aguascalientes (+7.48 points), Tlaxcala (+7.37 points), Nayarit (+6.65 points), Puebla (+6.4 points), Chiapas (+5.68 points), Guanajuato (+5.66 points), Tamaulipas (+5.49 points), and Coahuila (+4.95 points).
  • 10 States with the Highest Impunity Indices. 1) Estado de México (80.06), 2) Tamaulipas (78.88), 3) Baja California (78.08), 4) Coahuila (77.88), 5) Quintana Roo (77.33), 6) Guerrero (76.08), 7) Aguascalientes (75.85), 8) Veracruz (75.62), 9) Puebla (75.59) and 10) Oaxaca (75.12).
  • Murder Goes Unpunished in Mexico. The percentage of people jailed for murder related to those murders being investigated decreased from 27.5% to 17.09%.
  • States with Practically No System of Justice. We must remember that Mexico has four times fewer judges and magistrates than the rest of the world (3.9 for every 16,000 citizens). The country is in this situation because there is a deficit in appointments at boh the state and federal level. The following states have fewer judges and magistrates than the average to service the population: Aguascalientes (3.34), Baja California (2.73), Coahuila (2.74), Hidalgo (2.5), Estado de México (2.32), Michoacán (3.2), Nuevo León (2.56), Puebla (1.5), Sonora (3.31), Tamaulipas (3.08), Tlaxcala (2.82), and Yucatán (2.97).
  • The number of judges and magistrates per hundred thousand residents increased marginally from 3.5 to 3.59.
  • Mexico has half the state preventive police (50.86%) than it should have as a minimum.
  • The public prosecutor offices are collapsed: the average number of agencies is 3.53 per 100,000 residents. The staff at these offices decreased from 33.9 to 31.19, the agents from 7.6 to 6.27 and for, every thousand crimes committed, the proportion of agents went from 5.31 to 4.97 (all percentages are per 100,000 residents.)
  • The percentage of inmates without sentence went from 35.7% to 27.71%, due to the entry into effect of the new criminal justice system.
  • The ratio of jail personnel to inmates decreased by 15%, going from 0.2 in IGI-MEX 2016 to 0.17 in IGI-MEX 2018.
  • With 80.06 points, Estado de México has the highest impunity index in the country. There are 202,205 pending cases, the highest in the country. Only 1,209 people were sentenced  and only 0.59% of all cases end in a sentence, which speaks of the weakness in cases management by the prosecutor’s office.

UDLAP Presents the Study Global Tax Evasion in Mexico

By invitation of the Tax Administration Service (SAT), Universidad de las Américas Puebla undertook the study Global Tax Evasion in Mexico. This study is an analysis of tax collection and evasion in Mexico during the 2005-2016 period, and was presented by Dr. Luis Ernesto Derbez Bautista, UDLAP´s president.

To begin, Dr. Juan Manuel San Martín Reyna, Director of Outreach and Institutional Development at UDLAP, stated that this work aims to expose the rates of tax evasion in the country, with the additional objective of updating the study carried out the previous year, incorporating now the Special Tax on Production and Services and the General Tax on Imports and Exports. “Basically what we did was to determine what is the maximum or potential quantity that could be collected in the country and compare it to what is actually collected.”

Then, Dr. Luis Ernesto Derbez Bautista praised the work done by the Tax Administration Service for obtaining spectacular results in the last five and a half years, eliminating exonerations and evasion in the country. “For us, working with these type of studies is simply to complement what we want as a research institution, which is to go into the topic of impunity and elimination of corruption in Mexico”.

He added three recommendations to continue to promote tax collections: 1) Keep up the technological modernization in the supervision of tax payments; 2) Amend the Tax Reform, eliminating exemptions and zero tax in different products; 3) Attack informality, incorporating small and medium companies in the informal sector of the Mexican economy. “If we applied these points as part of a government plan, the next government would possibly have an additional income of 1 to 1.4 trillion pesos. Continuing the work done by the Tax Administration Service, it is possible to collect, if not this amount of money, at least half or a third of it, and we’re talking about 500 to 700 billion pesos per year”, stated Dr. Derbez Bautista.

One of the main results of the study is the trend of decreasing tax evasion in Mexico – associated to IVA, ISR, IEPS and IGIE (General Tax on Import and Export) – since it went down from 42% in 2005 (equivalent to 5% of GDP) to 16% in 2016 (equivalent to 2.6% of GDP). In terms of the benefits obtained, Dr. Derbez highlighted that IVA tax evasion went from 33% in 2005 (equivalent to 1.7% of GDP) to 16.4% in 2016 (0.9% of GDP). The authors pointed out that the study shows that practically 80% of GDP in our country could be subject to IVA and that yet, keeping a wide range of special taxations (zero tax and exemptions) represents almost a trillion pesos per year.

Regarding ISR, tax evasion dropped from 50% in 2005 (equivalent to 3.5% of GDP) to 19% in 2016 (1.5% of GDP). The UDLAP academics stated that the ISR categories that have advanced the most against tax evasion were Companies (the evasion rate went from 54% to 20%), as well as Wages and Salaries (the evasion rate went from 36.5% to 11.5%). On the other hand, the ISR lines that advanced the least against tax evasion were Rents (tax evasion rate of 91% down to 73.4%) and Individuals with Business Activities (went from 69.5% to 56%).

As for IEPS, its analysis was divided in oil IEPS (gasoline and diesel) and non-oil that includes alcoholic beverages less than 14 proof, alcoholic beverages above 20 proof, flavored drinks, tobacco and cigarettes, telecommunications, games and raffles, pesticides, and non-basic food. Regarding the former, the study found a tax evasion rate in gasoline and diesel of 2.2%, while non-oil products had a tax evasion rate of 9.4%. The sum of both is equivalent to 0.1% of our country’s GDP. It is important to mention that the highest evasion rate within IEPS was pesticides with 26.8% ($236 million pesos).  However, even if the rate in gasoline is less (2.2%) in money terms it amounts to much more than pesticides ($6.5 billion pesos).

Finally, regarding the General Tax on Imports and Exports, the authors found that the tax evasion rate for 2016 was 10.9%. Thus, the authors pointed out that the total evasion in 2016 in Mexico was 510 billion pesos, which represented 2.6% of our country’s GDP.  The results of the study show a trend of diminishing levels of tax evasion in Mexico, especially since 2012, which can be explained by the widespread use of collection technology, as well as the first effects of the Tax Reform.