On October 21, the Chamber of Deputies passed a tax reform presented by the Secretary of Finance and Public Credit, Arturo Herrera, which proposes limiting the funding of organizations and foundations authorized to receive donations deductible from income tax (ISR, in Spanish). 

In practical terms, when more than 50% of their funds come from sources unrelated to their corporate purpose, they may lose their permission to operate. In addition, they must allocate all their assets to other entities authorized to receive ISR-deductible donations. According to the current law, there are twelve activities that would be covered by this restriction, including welfare, educational, research, cultural and ecological organizations. 

Currently, the Law of Civil Society Organizations prohibits donations from sources that do not agree with the corporate purpose registered by the institution. The authorities argue in defense of the reform that it is necessary to “prevent these entities from carrying out activities aimed at obtaining a profit. It is highly likely the Senate will pass the bill in the coming weeks.