Seeking to improve understanding, communication, and cooperation between Mexico and the United States by promoting original research, encouraging public discussion, and proposing policy options for enhancing the bilateral relationship.
Mexico’s elite are quaking after leftist lawmakers passed a new law that makes tax evasion a type of organized crime that could justify the seizure of assets even before judges rule on the validity of charges.
Lawmakers in the country’s lower house Tuesday passed the bill that would make tax fraud of more than 7.8 million pesos ($400,000) a national security threat and a type of organized crime that could be punished with prison without parole during trial and with as much as nine years behind bars.
By Oscar Campero and Yoshio Uehara of Chévez Ruíz Zamarripa y Cía
Mexican taxpayers are obliged to determine their taxable income and authorised deductions derived from related party transactions considering the prices that would have been used in comparable transactions with or between independent parties. This is, in Mexico the arm’s length principle is recognised for tax purposes.
In the previous administration (2), the transfer pricing department within Mexico’s Tax Administration (“SAT” for its acronym in Spanish) had an important role, from handling a mere documentation compliance matter to acting as a strategic risk assessment tool for multinational companies (“MNEs”).
Mexico’s finance minister said on Tuesday that the country may eventually require a revamped tax code, although he reiterated President Andres Manuel Lopez Obrador’s promise of no new taxes during the first three years of the administration.
“The tax structure will not change in the first three years, but we have to think about what tax structure the country will need in 2022 and beyond,” Finance Minister Arturo Herrera said at an event in Mexico City.
Mexican Finance Minister Arturo Herrera said on Monday that his government is in talks with digital platforms about taxes, aiming to ensure that all corporations pay their share.
Mexico is exploring taxing purchases on Amazon, Uber and AirBnB and other digital platforms to boost the tax take and to help fill a multibillion-dollar revenue hole after changes in the way state oil company Pemex contributes to government coffers.
Mexico President Andrés Manuel López Obrador says that the government is ending tax forgiveness, which for years had been a gift to the country’s biggest taxpayers. According to the government, the pardons were abused under the previous administrations of Felipe Calderón and Enrique Peña Nieto to the tune of more than $15.5 billion uncollected since 2007.
When Mexico’s incoming president Andrés Manuel López Obrador (a.k.a Amlo) clinched the presidency by a landslide election in July, the victory was met with cautiousoptimism. Few investors, or citizens for that matter, knew what to think about the former Mexico City head of government.
Some of his campaign promises seemed fantastical. For instance, he aims to balance the budget, while simultaneously increasing infrastructure spending, raising pensions and subsidising farmers. Oh yeah, and all without raising taxes.
Since Mr López Obrador does not take the political reins until December 1, it’s hard to know how many of his promises will come true. But this weekend, things could get a bit clearer.
Donald Trump has been elected U.S. President as disrupter in chief; somebody that can get things done and change the status quo.
One of the centerpieces of his program appears to be a complete revamp of the U.S. tax system. “I understand the tax laws better than almost anyone. And that is why I am one that can truly fix them,” he said several times in debates and rallies. The idea is to end up with a system that favors investment on infrastructure and capital goods.
His background as a developer and his penchant for not paying taxes have led him to believe that the best way to promote growth and generate government revenue is taxing consumption rather than investment. Furthermore, his infrastructure ambitions need significant private investment funds that might only come with a favorable regime. The idea is to prompt firms and banks holding more than a trillion dollars in cash to put it to work.