The Mexican government has figured out a way to dramatically simplify the payment of taxes, at least for one segment of society: artists. Mexican artists who elect to participate in the program must donate good quality works of art to the government based on the number of works sold during the tax year. Here’s how it works. If an artist sells 1-5 paintings, then that artist must pay a tax of 1 painting. If 6-8 paintings are sold, then 2 paintings must be donated. The maximum number that any artist is required to donate is six. The “Payment in Kind” program began in 1957 and is very popular among artists of virtually every skill level.
Virtually every skill level because if you can’t sell your art, then the government doesn’t want it. In fact, even some art that can be sold is not very good, but tax collectors still accept it. And what is done with all this artistic “revenue”? It adorns the halls of government buildings and public spaces all across the country. Its actually quite a fantastic “win win” for the artist who gets to avoid paying taxes in currency and also may benefit from the public display of his/her pieces. Those who participate in the Payment in Kind program are required to donate a quality piece of art that is of similar value to the pieces that were sold and also that is representative of the particular artists body of work. There are art experts on staff at the Mexican Tax Administration Service who make sure the artwork meets these standards. But since there is a chance the government will display the donation, most artists are motivated to donate some of their best stuff.
The Mexican government has amassed an impressive collection of paintings and other artwork from some of Mexico’s finest contemporary artists. But, because the program is open to anyone who sells art, it has also accumulated a huge collection of garbage that nobody would dare hang on their wall. That might be the biggest drawback…that, and all the actual revenue that the country is missing out on.