Eliminating the lien will generate a legal problem: deputies

The Chamber of Deputies will wait for President Claudia Sheinbaum to send an initiative to repeal the 8 percent IEPS for violent video games or those not suitable for children under 18 years of age, because although she can issue a presidential decree of exemption, the rate and tax would remain in force in the 2026 Income Law, which would also have to be modified, explained Morena coordinator Ricardo Monreal Ávila.

Because the Income Law was already promulgated by the Executive on November 7, the President cannot veto portions of its content or suppress an already approved tax and, furthermore, a possible decree of exemption or tax credits would have to be issued no later than December 31.

In a broad analysis of the effect of the presidential decision not to apply the tax, which was proposed to the Chamber in September within the IEPS law, Monreal Avila highlighted that approving the income is the exclusive power of the Chamber of Deputies and, therefore, he would have to repeal section K, section I of the article of the law, which provides for the tax on violent video games, as well as recalculate the amount of income.

Because although a collection of 183 million pesos is expected, this is barely 0.002 percent of the total income, suppressing it would also imply modifying the cover of the Income Law.

He said that the announcement of the withdrawal of the tax, with the argument of a technical infeasibility for its application, derived from the difficulty in objectively classifying the video games subject to the tax, generates a legal problem.

Since the tax is not only an estimate in the Income Law, but a fiscal obligation, with a legal basis, and because the Executive does not have the power to disapply a current contribution, even if it considers its design deficient.

“The lack of a state video game classification system does not suspend or extinguish the tax obligation provided for by law” and while the aforementioned section is in force “the tax authority is obliged to apply it,” he indicated.

However, he stated that there are two solutions, one of an administrative but short-term nature, through a presidential decree of fiscal stimulus, which empowers the Executive to grant exemptions, reductions or tax credits with respect to the IEPS applicable to video games. This “would allow the collection to be neutralized, but it would not correct the underlying inconsistency nor provide long-term legal certainty to taxpayers.”

And secondly, if “the Executive considers its application unfeasible, the constitutionally correct solution is its legislative modification or repeal, in the substantive tax law that created it.”