Mexico: Trust Register for Tax Incentives planned

On November 13, 2018, the governing party Morena introduced a law initiative that is aimed at increasing the people`s trust in the government. Its goal is to offer tax incentives and administrative benefits to taxpayers (both individuals and companies) in order to increase their economic activity with less bureaucratic hassles.

While specific benefits have not bene outlined in the initiative, it did include the creation of a department as part of the ministry of economics   to develop and implement the respective measures.

Mode of Operation

Taxpayers looking to profit from the benefits will have to voluntarily register in the “Register for Trust Promotion” and swear under oath that they will comply will all legal tax laws and regulations. Taxpayers that have registered will automatically receive the benefits.

The idea behind the register is to fight corruption and reduce the number of inspections.

In order to implement such an initiative the ministry of economics and its neighboring institutions would have to carry out the following steps:

  • Definition and country-wide coordination of the benefits and incentives
  • Define nature of compliance checks that have to be provided by a fraction of the registered taxpayers
  • Define sanctions for non-compliance

 

Sanctions

The initiative already outlines possible sanctions for non-compliance including the temporary ban from the register which retracts the respective privileges. Furthermore, verification processes are planned until the taxpayer is allowed to register again.

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