Environmental Taxes in Mexico
By: Patricia Cabrera Quiroz
Environmental taxes, also known as green taxes, are economic instruments that incorporate the negative environmental costs associated with the production or use of goods. These taxes have two main objectives: first, to influence the behavior of consumers and producers by discouraging the consumption of products or activities that harm the environment; and second, to increase government revenue by allocating the funds obtained to the environmental sector.
These taxes are applicable to individuals and legal entities considered as fixed sources within the territory of the federal entities, which levy a tax for the emission of greenhouse gases into the atmosphere.
The creation of state-level environmental taxes in Mexico was upheld by the Supreme Court of Justice of the Nation in 2019. As a result, in 2023, thirteen states implemented these taxes, with Zacatecas being the first. Other states that have already enacted these taxes include Mexico City, the State of Mexico, Guanajuato, Nuevo León, Querétaro, San Luis Potosí, and Yucatán.
State green taxes can be classified, primarily, into:
- Tax on the Extraction of Materials from the Soil, Subsoil, Stone and Minerals.
- Tax on Emissions of Gases into the Atmosphere.
- Tax on the Emission of Pollutants into Soil, Subsoil and Water.
- Tax on the Deposit or Storage of Waste.
CEMGI has a highly specialized interdisciplinary team for determining green taxes at the state level, ensuring strict compliance with the specific guidelines of each state and their respective regulatory updates. These guidelines cover, among other aspects, the identification of obligated entities, the emissions generation period, the type of discharges and greenhouse gases considered, the tax base, the applicable rates according to the type of base, the established deadlines for filing monthly and annual returns, as well as the existence of subsidies and compensation mechanisms derived from the implementation of pollution reduction strategies.
SUMMARY
Environmental taxes, or green taxes, are economic tools that reflect the negative environmental costs of producing and using goods. Their objective is to influence the behavior of consumers and producers, discouraging activities harmful to the environment, and increasing government revenue to finance the environmental sector. These taxes are applied to individuals and corporations that emit greenhouse gases within the federal entities.
The creation of these taxes was approved by the Supreme Court of Justice of the Nation in 2019, and in 2023, thirteen states, including Zacatecas, Mexico City, and the State of Mexico, implemented them. Green taxes are classified into four categories: extraction of materials, gas emissions, pollutant emissions, and waste storage.
CEMGI has a specialized team that ensures compliance with the regulatory guidelines of each entity, covering aspects such as the identification of obligated parties, issuance periods, and applicable fees. They have also collaborated in determining environmental taxes in the State of Mexico and in assessments of their applicability in other states of the country.
