MEXICO – Update 15th June
Proposals to cut VAT as crisis measure advance in Mexico’s senate
Momentum is building in the Mexican senate on proposed legislation to temporarily lower value-added tax (IVA) on most goods and services from 16% to 10% as an emergency measure to mitigate the economic impact of the COVID-19 pandemic.
Source Credit – bnamericas
MEXICO – Update 10th June
Senate considers to reduce VAT from 16% to 10% for six months
Source credit – Richard Asquith – (Avalara)
Senator Eduardo Ramírez Aguilar from Moreno is preparing a bill to reduce the rate VAT from 16 to 10 percent.
The legislator from Chiapas, one of those closest to the coordinator of the Morena bench in the Senate, Ricardo Monreal, explained that his proposal is aimed, at this stage of the Covid-19 pandemic, at promoting consumption, severely affected in recent two months.
The initiative would not cover regions on the northern border, which have a percentage of eight percent, with a different tax rate.
“It is to promote consumption and revive the economy. In restaurants, in hotels, in transportation (…) in everything that is taxable, VAT is cheaper”, he said.
But inevitably it will hit the tax collection, he was asked.
“Sure, that’s why I prepare it right now, to see what the Treasury tells me, to see how I attenuate it, that’s why I don’t have it complete yet,” he said.
“It is a different policy, of course, but as long as there are bigger taxes, there is more money for social programs; but in these moments of contingency, I do believe that it would help the national economy a lot. One million jobs could be recovered, according to the IMSS So what I want is for the VAT to go down to 10 percent.”
The president of the Committee on Constitutional Points clarified that 25 percent of the general contribution corresponds to Income Tax, and 16 percent, to VAT.
“If this represents 16 percent in the collection universe, and we lowered it to 10, we are talking about it having an impact of 9 percent in general, plus less,” he explained.
Ramírez Aguilar will present his initiative next Wednesday in the session of the Permanent Commission of the Congress of the Union.
Source Credit – explica
MEXICO – Update 20th May
Mexican government expedites VAT refunds to ease cash flow concerns
Speculation has circulated as to whether the Mexican government will grant tax incentives or other options to ease the impact of COVID-19. As of now, little to nothing has been offered that provides benefits to the Mexican subsidiaries of foreign companies.
One positive development has been a message from the executive branch of the Mexican government related to value-added tax (VAT) refunds. The Mexican tax authorities have been instructed to process VAT refunds as quickly and efficiently as possible to assist with cash flows.
Source Credit – plantemoran
MEXICO – Update 6th May
Speedy Value Added Tax credit repayments
The Mexican Tax Administration is to offer speedy Value Added Tax credit repayments to assist businesses during the COVID-19 crisis.
The current deadline is a refund within forty days, will be reduced.
Source Credit – Richard Asquith (Avalara)