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IMF Urges Mexico To Shore Up Tax Regime

by Mike Godfrey, Tax-News.com, Washington

21 November 2017


The International Monetary Fund (IMF) has urged Mexico to strengthen non-oil tax revenues and increase levels of tax compliance, especially in the area of value-added tax.

While the IMF commended the Mexican Government for sticking to its fiscal consolidation objectives, it recommended a series of measures to secure the revenue base.

According to the IMF's latest Article IV report, the Mexican authorities "shared the view that VAT revenue performance is especially weak, in part because of a large compliance gap amounting to a significant share of VAT revenue currently collected."

The IMF recommended that the scope of VAT exemptions should be narrowed, and that additional efforts should be made to tackle tax evasion and broaden the tax base.

It was suggested in the report that increasing revenues from property taxes would help to bolster local governments' resources over the medium-term.

The IMF also proposed that Mexico should stand ready to adjust its corporate tax regime in the event that the United States succeeds in passing a tax reform bill with a substantial corporate tax cut, as is currently proposed.

TAGS: compliance | tax | value added tax (VAT) | tax compliance | property tax | International Monetary Fund (IMF) | corporation tax | Mexico | United States | tax reform | VAT compliance matters

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