Natural Resource Taxation in Mexico: Some Considerations

October 18, 2021

Preview Citation

Format: Chicago

Alpa Shah. Natural Resource Taxation in Mexico: Some Considerations, (USA: International Monetary Fund, 2021) accessed September 18, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Mexico has large extractive industries and it traditionally has raised sizable fiscal revenues from the oil and gas sector. A confluence of factors—elevated commodity prices, financial challenges of the state-owned oil company Pemex, and revenue needs for financing social and public investment spending over the medium term—suggest that a review of Mexico’s taxation regimes for natural resources would be opportune, against the backdrop of a comprehensive approach to tackling Mexico’s challenges. This paper identifies opportunities for redesigning mining taxation to increase somewhat the revenue intake while maintaining the favorable investment profile of the sector. It also discusses recent reforms to the oil and gas fiscal regime and future reform considerations, with attention to the attractiveness of investment on commercial terms—an issue that should be placed in the context of an overall reform of Pemex’s business strategy and possibly of the energy sector more generally.

Subject: Average effective tax rate, Economic sectors, Mining sector, Oil prices, Oil, gas and mining taxes, Prices, Production sharing, Tax policy, Taxes

Keywords: Average effective tax rate, Cost cap, Fiscal regime, Gas and mining taxes, Global, Investment profile, Mining, Mining sector, Natural resource taxation, Oil, Oil prices, Pemex's taxation regime, Petroleum, Production sharing, Revenue intake, Taxation, Western Hemisphere

Publication Details

Pages:

36
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2021/245
Stock No:

WPIEA2021245
ISBN:

9781513599663
ISSN:

1018-5941

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