Mexico Considers Fiscal Reform Proposal To East Trade

Trade & Policy

Mexico Considers Fiscal Reform Proposal To East Trade

The Mexican Congress is currently considering a broad-ranging fiscal reform package unveiled last month by President Enrique Peña Nieto with the goal of creating a fairer, simpler and more transparent domestic tax regime that reduces income inequality, increases public investment in education and infrastructure, and encourages trade.

The package is proceeding through the legislative process as a series of stand-alone measures, including bills to amend the tax code and the value-added tax, customs and budget laws.

The government is proposing to modify the Customs Law in a number of ways to promote imports and exports, encourage a more open trade regime, and enhance electronic information exchanges between the various domestic government authorities. A summary of the main customs-related provisions included in President Peña Nieto's proposal and approved by the Chamber of Deputies is provided below.

1. Use of customs brokers would no longer be mandatory and importers and exporters would be able to file for customs clearance directly through a legal representative, who would have to comply with certain conditions (including the need to be a Mexican national).

2. Strategic fiscal areas could be established anywhere in the country and goods in these areas could be subject to processing and even commercialization.

3. Documents sent to customs authorities electronically would be afforded legal recognition.

3. Customs clearance could be granted through any customs office.

4. All of a company's representatives would be legally responsible before customs authorities.

5. Imports of locomotives, railroad cars and specialized goods of the railway industry would be allowed under temporary import regimes.

6. Customs authorities could authorize individuals (except importers, exporters and customs brokers) to provide pre-validation services.

7. Customs declarations could be corrected both before and after a determination is made to subject a transaction to examination by customs authorities.

8. The ability to change the customs regime under which goods are imported without prior notice to customs authorities would not be limited to maquilas.

9. Importers would be able to convert temporary imports to regular imports even if the authorized length of time for the temporary import has expired or customs authorities have begun verification.

10. Goods would be eligible for storage in a customs warehouse regardless of how they are transported (land, air, sea).