b. Taxes on sales by the producer of beer and wines, the legitimate product of grapes, sugar cane, or fruits, of national origin, according to the provisions of Art. 12 of this law.........

(Article 12 provides for a tax on preparations called wines, of sugar cane or fruits, of national production, which amounts to the following:

I. Preparations, etc. (already specified

above)

.25% of value

.27% of value

II. Legitimate wines from the grape...15% of value
III. Domestic beer

This beer is exempt when ex-
ported.

IV. Foreign alcohols and alcoholic bever-
ages, pay on duties of importa-
tion, surtax....

V. Grape wines of foreign production,
on amount of import duties,
surtax

.75%

..70%

Articles 13 and 14 state that the Executive will regulate the manner of allocating the tax authorized in Section (a) of Frac. X of Art. 1, and dictate the measures necessary to avoid any fraud arising from Frac. III of Art. 12.)

c. and d. Taxes, or rather surtaxes, on import duties on foreign made wines, alcohols, and alcoholic beverages; and foreign made beers; according to the rates fixed by Article 12 of this law..

e.

Taxes on Oil Lands and Oil Contracts..

(This is a tax of the Carranza period, which has never been collected, as it has been threshed out in the courts and resisted successfully by several companies, who obtained injunctions against it. The law, however, still stands.)

f. Tax on mining property.

(This tax is levied on a "pertenencia" of one hec-
tare each. The law of June 27, 1919, is still in force,
and reads as follows:

"Art. 3. All mining property is subject to an
annual tax payable in installments each four months, or
'tercio,' according to the following regulations:
(a) From one to five hectares, six pesos per hectare,
or $2.00 for each tercio (third of a year).
(b) Six to fifty hectares, $9.00 per hectare, or $3.00
per tercio.

(c) Fifty-one to one hundred, $12.00; or $4.00 per
tercio.

3,800,000

3.000.000

25,000

1,700,000

(d) One hundred and one and upwards, $18.00 per
hectare, or $6.00 per tercio.'

(To illustrate the method of calculating this tax, sup-
pose a mine to have 120 hectares or pertenencias. The
tax is then figured on the following basis:

Now, by Article 24 of the Tax Law for 1923, a part of this tax is devoted to municipal divisions and subdivisions, viz.: "The amount of progressive tax over the normal of $2.00 per tercio ($6.00 per annum) per hectare, established by Fractions (b), (c) and (d) of the law of June 27, 1919, shall be applied to the municipalities, municipal sections, commissaries etc., where are situated the mining properties thus taxed; such amounts to be destined exclusively to water service, opening and maintenance of roads and schools in said localities."

By Article 25 of this same Tax Law for 1923, an interpretation of the mining tax law is made which is favorable to the taxpayers. Viz.:

"The progression of the quotas established by the law of June 27, 1919, will be made effective; always providing that the pertenencias belong to one sole owner and are situated within the boundaries of one sole municipality."

Thus although there may be 50 adjacent pertenencias of one sole owner, if five are in one municipality, five in another and the remaining forty in another, the tax is reduced considerably, for the tax would be calculated at 5 at $6.00, and 35 at $9.00, the remainder being two lots of 5 each at $6.00 per annum.)

g.

Tax on inheritances and legacies.

800,000

h.

Sealing of weights and measures, when done by fed

eral authorities

100,000

Patents and Trademarks.

55,000

i.

j.

a.

Use and benefits from water in federal jurisdiction.... 450,000

XI. SPECIAL TAXES ON EXTRACTIVE INDUSTRIES
Tax on gold, silver and industrial metals....
b. Tax on production of national petroleum.
Tax on melting, fining and coining, etc..

C.

(Section (b) is part of the revenue derived from the operation of the Petroleum Law, of which arbitrary allocation is made, so as to set apart a portion of the oil revenue and classify it as Export of Petroleum and its derivatives, to satisfy the conditions of the Lamontde la Huerta agreement which makes the export tax on

8,000,000 ..50,000,000 700,000

petroleum subject to the payment of certain obliga-
tions.

The metal tax was revised by law in 1919 and the
tax, at present, is variable as regards silver, for ex-
ample, the basis for calculation being five and one-half
per cent of the value when the New York price is be-
tween 60 and 70 cents, U. S. gold per Troy ounce. This
same tax is levied on silver whether exported or
smelted, refined, or assayed.

On gold the tax for production-Section (a), or
Section (c)-is 9.3333 cents Mex. gold per ounce
Troy of fine gold.

XII. PUBLIC SERVICES

a. Products and revenues of postal service.

b. Products and revenues of telegraph service.

C.

Products of service of Vera Cruz dock and Guaymas marine railway.

d. Products of work done or service rendered by establishments maintained by the Government.

e. Compensation for expenses incurred in services of inspection, special services, or others rendered by the Government.

f.

a.

(This includes the cost of care of property sequestrated or intervened by the government.)

Premiums resulting from exchanges of funds.

(As many payments, such as consular charges, etc., in foreign countries are made in the money of that country, and the rate of exchange is fixed by the Secretary of the Treasury each month, there is a resultant profit on the books from such operation, especially where the funds are used in the same country for operations of the Government, as the difference between the buying and selling rates.)

Profits of the operations of the Monetary Commission.

XIII. REAL PROPERTY OF THE FEDERATION

Products of national and nationalized property.

b. Products of rentals or operation of national and nationalized

C.

property.

Product of the sale of real property.

d. Product of permits or concessions for the occupation of the federal zone.

e.

(The federal zone is a belt of land of a certain width on the coast or within a certain distance of the frontier or from navigable waters, and is of especial interest now on the Gulf Coast of the petroleum regions.)

Rentals or exploitation of real property of the Federation, not otherwise specified.

g. Net products of the operation of the railroads belonging to the Federation.

a.

XIV. MOVABLE PROPERTY AND VARIOUS REVENUES

Products of operations done by the Government or in which it participated.

b. Interest on funds of the Federation.

c. Participation in the administration of unclaimed legacies. d. Products proceeding from movable property not specified. Products from publications of the government.

Fines.

Cessions and donations to the Government.

e.

f.

g.

h.

i.

Various revenues not specified.

Indemnities to the Federal Government.

j. Product of railway shares or other evidences of credit.
k. Product of the National Lottery for Public Charities.
(By Art. 23 of this law, ninety per cent is to be
used for public charities after deducting the expense
of carrying on the lottery, and the remaining ten per
cent goes to the General Treasury. The total for this
year is estimated at $4,000,000 approximately.)
Profits accruing from the Public Debt.

1.

m. Fisheries, pearl fisheries and allied interests.

n.

0.

Contributions from the municipal Boards of Towns in the Federal District for the maintenance of Municipal Schools at the charge of the Federation.

Payments to be made by the Municipal Board of the City of Mexico for the salaries and expenses of the Traffic Service of the City.

p. Arrears of credits, taxes, charges, or federal revenues not collected in former years.

Article 28. The Executive is authorized to establish new import and export quotas, to increase, diminish, suppress or modify the tariffs referred to in Fractions I and II of Article 1 of this law, with the exception of the quotas, and fractions thereof, mentioned in the law, and also to modify consular fees in those cases where governments of other nations establish for Mexicans abroad other fees, distinct from those collected by Mexican consulates of the nationals of other countries.1

The Executive is also authorized to increase or diminish the mining and petroleum tax, always provided that on the first day of September, 1923, he give account to Congress of the use which he has made of such authority.

"The "quotas and fractions thereof" mentioned above are some changes made in the tariff by Congress, which do not properly come into this article, as they belong to the Customs or Imports and Exports.

The estimates for Fractions XII, XIII and XIV are not given as the data are not at hand at present. They are comparatively unimportant, for the new features of the law are in the other Fractions of the law.

Even some of those estimates given are again in process of revision and modification according to information given by the press.

SYSTEM OF COLLECTION

The greater part of the collection of federal taxes is done through a systematic use of stamps, which operate as a check on all employes who have the handling of the vouchers, receipts or cash connected with the collection.

The more important taxes (excepting the import and export and petroleum taxes) are paid through stamps of a special kind for each tax, as may be seen by the laws authorizing their collection and the authorization of the Executive to order the kind of stamps to be made especially for the purpose. The import, export and petroleum taxes are so documented and covered by vouchers as not to need the check of stamps. But the documents, invoices of ordinary domestic commerce, all evidences of payments, obligations, and the surtax (which is covered by a special stamp called "Federal") on all State and municipal levies, operate to avoid. frauds against the Treasury, the latter stamps also acting as check on the State and municipal collecting offices, whose receipts have to check with the accounts of the Federal receiving offices who sell the stamps to them.

The Federal Government credits the State governments with a certain percentage for the service of handling the federal stamps and cancelling them after affixing them to the receipts given to the taxpayer for the State or municipal taxes collected.

This system has been in use for some thirty odd years and has been found to be the most economical way of collection, as well as the most efficient one for "getting the money" without peculation, as the chance of collusion between the federal and local officials is minimized, and only a counterfeiting of the stamps by combination with the receiving official could successfully operate to defraud the Treasury. This has been tried at different times without success, as detection of the fraud was almost immediate, even when matters were in a more disorganized condition than at present.

In fact the Mexican system of collection of its revenue on the whole may be said to be very economical and efficient.

In each State there is located an official called Jefe de Hacienda who attends to the handling of funds arising from the special taxes covered by special stamps and to the receiving and transmission to the General Treasurer of Federal funds. All employes handling stamps and funds are bonded.