**Federal Government Tolerates Informality in the Country: Expert Opinion**
According to fiscal expert Adolfo Solís Farías, almost seven out of ten businesses in Mexico operate informally. Despite the desire for a robust system with steady revenue, low crime rates, and improved infrastructure, the federal government continues to tolerate informality, Solís Farías argues. He emphasizes the need for reforms to support merchants transitioning into formal operations, cautioning that legitimacy in regulation is often seen as granting favors rather than necessary governance.
He highlighted that the informal sector’s growth over the past two decades has been significant, partly due to the lack of sufficient reforms. Solís Farías references a 2004 reform to the Federal Fiscal Code that intended to account for the informal market, which remains largely undocumented. As a result, a small percentage of the workforce and businesses bear the financial burden of public costs. Currently, 11.5 million active workers contribute only 3% to public funds, while a small number of large enterprises contribute over 50% to the national economy.
Moreover, approximately 2.4 million standard businesses provide 21% of public income, with physical taxpayers accounting for 24%, mostly stemming from 99,000 significant contributors. In contrast, those involved in low-level businesses or seen as government support have minimal tax obligations. Solís Farías points out that instead of incentivizing formality, the government often rewards informality, which continues to be an electoral advantage.
**Secondary Article: Informal Economy in Mexico Grows Amidst Economic Challenges**
Amid ongoing economic downturns globally, Mexico’s informal economy remains a pillar for many families seeking to overcome financial strain. The informal sector provides employment opportunities for millions, though it poses challenges for the country’s economic development and tax collection. With limited access to formal employment, many turn to informal businesses as a viable solution for income.
Recent reports indicate that government efforts to integrate informal workers into the formal sector have been sluggish, raising concerns among economic analysts about the long-term implications for economic stability and growth. As the government grapples with the issue, experts suggest an overhaul in fiscal policy and a comprehensive plan to transition the informal workforce into formal employment. Such changes could increase tax revenue, bolster social programs, and drive sustainable development if effectively implemented.
Economists urge the government to implement strategic incentives and training programs to bridge the gap, facilitating a smoother transition to formalization while sustaining livelihoods within the informal sector. As the debate continues, stakeholders emphasize the urgent need for cohesive policies to address the informal economy’s complexities, reassuring both businesses and workers of the benefits of formalization.