Income and Expenses of the Municipality

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by Sandra D. Gaytan

Sandra D GaytanThe Mexican republic, officially the Estados Unidos Mexicanos, has 31 states and one Federal District. Each of the states is divided into municipalities (the equivalent of a county in the US), with the number of municipalities per state varying depending on population. Baja California Sur has five municipalities: La Paz, Los Cabos, Comondu, Loreto, and Mulegé.

Like all government entities, the municipalities of Baja California Sur have both income and expenses. When it comes to expenses, the municipalities are responsible for providing basic public services. These include water supply; drainage; sewage collection, treatment and disposal; street lighting; garbage collection; public markets; cemeteries; streets; parks and garden; public safety; and transit police.

The municipalities also incur expenses from administrative areas, such as the Public Registry of Property, Catastro Office, Department of Urban and Ecology Development, Department of Construction Licenses, Social Assistance Department, Sports Department, Tourist Department, Culture Department, and Civil Registry.

In order to provide the public services listed above, the municipalities must generate income. The income generated is outlined in the Income Law approved by the state congress. The Income Department of the municipality is responsible for collecting the taxes and fees outlined in the Income Law.

The municipality of La Paz collects the following taxes and fees: property taxes; acquisition tax on real estate transactions; tax on public entertainment and shows; tax on games, raffles, and lotteries; fees to obtain a driver’s license, renewal of license plates, as well as transit fines and tickets; registration fees to record a public deed at the Public Registry of Property; fees for any paperwork authorized at Catastro Office, such as appraisals, subdivisions, fusions, surveys and manifestations; fees to obtain a construction permit; fees to obtain a municipal permit to run a business; fees to set up a water service contract and the regular monthly water bill; fees to obtain a Certificate of Freedom of Liens and Certificates of No Taxes Owed; fees paid to the Civil Registry for registration of births, deaths and marriages.

This may seem like a long list of fees and taxes being collected. Remember, however, that the municipality also has a long list of expenses. In the last few years, the municipality of La Paz has been in dire straits financially. The municipality has been struggling to cover its expenses, especially to cover the payroll expense for municipal employees. The reality is that the municipality has been running in the red. Expenses have far outstripped income.

A new mayor and his party have just taken office. In the last few weeks, they have implemented measures and strategies to increase income and reduce expenses, with the aim of improving the municipality’s financial situation. We should remain positive, believing that the new administration will provide efficient services. As Mexican citizens and residents of this country, it is our duty to pay the appropriate and fair taxes. This not only helps resolve the municipality’s financial struggles, but it also gives us the right to demand excellent-quality services from the administration.

Sandra D. Gaytan is a licensed lawyer who earned her masters degree in tax law from the Technological University of Mexico in Mexico City.

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