The IP fight in court

Everyone expects it to be a fair, equal and, above all, legally-based “fight”, but the fact is that the coin is in the air in the dispute that was started a few years ago by the Tax Administration Service (SAT), led by Antonio Martínez, in operations carried out under the scheme of the Manufacturing, Maquiladora and Export Services Industry Program (IMMEX), where the companies involved in the litigation have demonstrated in previous instances that everything is calculated incorrectly.

The amount in dispute is estimated to be more than 44 billion pesos, and in some cases, some of the companies that filed an appeal and are involved in the process, represent more than six years of profits, not counting the investments stopped due to this issue.

Even the Employers' Confederation of the Mexican Republic (Coparmex), which he presides, has spoken out on the issue, estimating that there are more than 6,500 IMMEX companies at risk due to the SAT's interpretation, which would affect millions of direct and indirect jobs, and it will be in the courtroom of Judge Yazmín Esquivel where the decision and the future of this issue will be made.

The affected companies have worked on various fronts, as they consider that the Value Added Tax (VAT) Law is not being taken into account adequately, and this determination is currently being analyzed by the Supreme Court of Justice of the Nation (SCJN), which will resolve a conflict of theses.

For the affected companies involved in the litigation, the issue is of utmost importance, since on the one hand they consider that these issues are aimed at raising revenue rather than at legal clarity and punishing those who have failed to comply.

Since, as they have explained in public and in private, and taught to judges and magistrates, the SAT's decision to modify the criteria on the VAT applicable to virtual operations of the IMMEX program violates the principles of certainty and legal security, which in times like those the country is experiencing, with the threats of Donald Trump and the introduction of new tariffs, will only cause investments to pause and future ones to move away, since there is no clarity and, above all, Mexico is becoming more expensive.

Since in the end, with the application and interpretation of VAT, double taxation is being paid, and it is something that Minister Yazmin Esquivel will have to analyze in detail, undoubtedly a complicated task at a more than complex time for the country, and as requested by Coparmex, hopefully the SCJN will recognize the inadmissibility of charging VAT on virtual operations and the rule of law will prevail over the collection purpose.

Campaigns come and go, but while the use of electronic means for payments has grown among Mexicans, cash remains the main method of use, and along with that, another of the major pending issues is increasing savings.

Banco Sabadell, led in Mexico by Albert Figueiras, together with ITAM conducted a study in which only 24.8 percent of the population has a formal account, such as bank accounts, investment funds or savings insurance.

The rest depend on informal mechanisms – loans from acquaintances, or simply saving cash – which reduces their ability to deal with unforeseen events and build wealth. Not to mention that inequality in access to formal savings is evident, since while 47 percent of people in the high socioeconomic level (A/B) save, at the lowest level (E), only 8 percent do so.

The gender gap is also noticeable, as women report lower savings levels than men at all socioeconomic levels, as they do so more with a focus on family goals; in fact, almost 60 percent report having less than a fortnight saved.

This is where the issue of promoting financial education and promoting accessible solutions for savings and investment is key to reversing this harsh reality, where women continue to be more vulnerable, since they earn less, they have less capacity to save and yet they still try. In the framework of the upcoming week of International Women's Day, savings and pensions continue to be one of the topics to be worked on the most.

In recent years, it has been consolidating itself as a credit information company that is not only essential for financial institutions, but also now for Fintechs, since 95 percent of them are working with Círculo de Crédito.

The credit information company, whose general director is Juan Manuel Ruiz Palmieri, has managed to establish itself within the credit bureau industry as the preferred choice among digital financial institutions for its solutions, technology and service, since Fintech companies in the country have been part of its client network.

Of course, it is not easy, considering that before a loan could take weeks of paperwork and research and now, via digital means, loans and credit cards can be resolved in a few minutes and technology has been key in launching a fast and accurate API Hub; predictive models with linear regressions and with the application of artificial intelligence in necessary cases; alliances with third parties, which allow for in-depth knowledge of the credit life and payment commitment of a consumer; now analyzing the profile of a future borrower has changed and will continue to change with the application of new models. A good advance, without a doubt.

Welfare Bank dispersing

The greatest strength of Banco del Bienstar is undoubtedly the dispersion of Federal Government resources for social programs with its more than three thousand branches, but it has not necessarily managed to maintain solid numbers and attract clients permanently.

Under the leadership of Víctor Manuel Lamoyi, the institution managed to make a profit last year, but it is still far from being a bank that can be the reference for the so-called base of the pyramid, despite the number of resources it receives to disperse, yes, recognized, but creating more attractive products and services for Mexicans who receive money from a federal program is still far away.

For now, the coin is up in the air.