Ricardo Salinas Priego will have to settle his debts with the Treasury and pay nearly 50 billion pesos to the national treasury pending the SAT to detail the final exact amount. The Supreme Court on Thursday unanimously approved the tax credits that the businessman had filed against the Federal Court of Justice, which has ruled against him in all previous cases. This path ended in the High Court, where, as expected, the case was ruled against the interests of the billionaire, who was at risk of paying out the P35.873 billion that was originally distributed in seven cases. This figure has increased to include additional charges for late payments, which can extend up to 17 years in some cases. The largest lawsuit, initially valued at approximately $18.5 billion, was the first to be resolved by the plenary session. The plenary also approved a fine against the businessman for attempting to exclude the minister from one of the related appeals, in which Ministers Yasmin Esquivel and Renia Batres abstained from participating. After this day, which marks the end of a years-long journey, only two processes remain to be resolved in court for an initial value of just over 700 million.
The projects that the cabinet voted on this Thursday, which have been loudly debated due to the “importance of the issues in public opinion,” according to President Hugo Aguilar, are similar to each other and do not go into the essence of the issues raised by the owner of Electra, the protagonist of the trial. The High Court dismissed the company’s request for review or granted the Treasury’s request based on several arguments regarding the nature and scope of the issue.
Some cases argue that they do not involve questions of constitutionality (an area of analysis for the Supreme Court), while others argue that although there are questions in this area, they do not have a special interest in that issue or human rights issues, and therefore do not result in a new decision by the Court, which already has a large body of precedent on similar tax issues to draw from.
In short, the High Court’s case vindicated the process of a panel court that had already ruled against the billionaire. Amid Claudia Sheinbaum’s attack on Moreno’s government, Salinas Priego said the day before that she did not expect “anything different” from El Salvador than what the judge had ruled. “The court, politicized in disguise, has already made its decision,” he argued. However, lower courts typically resolved cases before judicial elections were held and resolved in the same direction. Various courts have held that complaints filed by companies are “null and void” because the unconstitutionality of the challenged regulations stems from circumstantial issues such as the company’s particular circumstances, alleged abuses of the law, or inaccurate language. In other words, it doesn’t touch on the core of the standard.
The case faced by Electra to this day appears historic because of the public and symbolic profile it gained, but it spans financial years from 2008 to 2013 and involves improper accounting of the company’s losses. This calculation is considered by tax authorities to be inflated, reducing the amount of tax that companies had to pay and giving them disproportionate tax benefits. SAT then demanded payment of the unpaid difference, but the company continued to pursue the lawsuit. This Thursday, the conglomerate announced that it would appeal to the Inter-American Court of Human Rights over the run-up of national highways, and has not ruled out suing public authorities for “financial extortion.” “Let me be clear: We will continue to fight in other cases, defending our rights in domestic and international courts and demanding that the amounts be fair and accurate,” they reaffirmed in a statement this Thursday.
Thursday’s lawsuit was extremely important for the administration, which has made fighting large debtors one of its main focuses. The president needs to raise revenue so he can sustain the social programs that support his projects without relying on tax reform, which he denies. To avoid this, the government will close the hole through which funds that should already be in the national treasury can slip. P2 billion is pending in court over tax credits. Although it is not the largest amount owed to businessmen, it is the one that concentrates the largest symbolic burden on the president. Salinas Priego’s and Sheinbaum’s rejections are mutual, and they only fuel expectations for a debate that will be broadcast in real time on the networks and in the president’s morning briefings, in addition to the courtroom. Gaining public support has become as important as winning the actual case.
One of the accusations that the President has repeatedly leveled is the use of expansive techniques to delay compliance with rulings in favor of the SAT. Without going into further detail, the businessman’s initial nine major cases at the Supreme Court resulted in 101 subsidiary issues, most of which were requested by business groups. However, they could not avoid the final outcome. The Supreme Court accelerated the move in light of the poll results, and on Thursday this week sent seven of them, unanimously including a simultaneous vote from Cabinet members who deemed them qualified for the position. Mexico’s fifth richest man will have to pay.
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