(Mexican G.S.T.) Effective January 1, 1983, Mexico instituted the Impuesto al Valor Agregado which taxes 15% on all goods and services except surface transportation and some staples. Residents and tourists are expected to pay this tax- NO ONE IS EXEMPTED. Think of IVA as a 15% Goods & Services tax or Sales Tax which is exactly what it is.
This tax may or may not be included in the marked price of your purchases. Mex-Dev accommodation rates do not include this tax but show it separately. In addition there is a further 2% for a total of 17% applicable to Hotel room taxes in Cancun and Puerto Vallarta. Consider this when you compare room rates while you are there.
If you aren’t convinced that you got the best deal all round, speak to me as you’ve overlooked something which will likely change that complexion, I’m sure. Comparing something with 15% included with something that is going to have it added later is not fair and adulterates the comparison by 30% or more, so ASK!
Currently the congress is re-inventing or overhauling the tax system as terrible abuses have been rampant in the past. Everyone has TWO sets of books. Heavy penalties for evasion are likely in the works to prod businesses and individuals to comply.
The stealing by politicians in the past made this practice honorable however with a stable peso and now more than just one ‘DOG’ watching the ‘roast’ plus substandard infrastructures it is obvious that everyone should and will have to pay their just due.
You can help in this process by asking whoever you are dealing with (especially my competitors) what their tax number is especially if they are charging you tax. Imagine some unscrupulous vendors charge tax but are not even registered. GRRR! Also pay attention in restaurants, (there’s a good reason that they don’t change tapes often) See if the tax is added and that telegraphs what tip you might want to leave and DON’T tip on the TAX for heavens sake. Our Tax No. is MDD-970430-1W2