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FY25 Economic Package: Initiative to Reform Federal Duties Law.

By José Escobedo | Senior Editorial Manager - Wed, 12/04/2024 - 11:00

On Nov. 15, 2024, the Minister of Finance and Public Credit delivered to the Chamber of Deputies the Economic Package for the Fiscal Year 2025, which includes, among other documents, the Initiative with Draft Decree Reforming, Adding and Repealing Various Provisions of the Federal Duties Law.

In the Statement of Motivation for the initiative, the federal government claims that those who benefit from the exploitation of substances and minerals from the subsoil must pay a fair and proportional retribution to the Mexican state; therefore, an adjustment in the special duties for the use and exploitation of minerals extracted from the subsoil has been proposed.

As justification for the foregoing, the federal government stated that during the "last few years, the quotations of international metal prices have shown a growing trend, with record prices not previously observed, which has contributed to mining companies benefiting from the increase in the prices of minerals in international markets, which translates into higher economic profits for such companies… ."

Therefore, through the Reform Initiative to the Federal Duties Law, it was proposed to amend Article 268 of the legislation, related to the Special Mining Duty, in order to increase the applicable rate from 7.5% to 8.5%.

Likewise, it was proposed to amend Article 270 of the Federal Duties Law, related to the Extraordinary Mining Duty, in order to increase the corresponding rate from 0.5% to 1%.

The comparative text between the current Federal Duties Law and its reform is as follows:

Current text

Amended text

Article 268. The holders of mining concessions and assignments, as well as the acquirers of rights related to such concessions who obtain income derived from the alienation or sale of the extractive activity, shall pay annually the special mining duty, applying the rate of 7.5% to the positive difference resulting from reducing such income, the deductions allowed in this article, through a report to be filed before the offices authorized by the Tax Administration Service no later than the last working day of the month of March of the year following the year to which the payment corresponds.

Article 268. The holders of mining concessions and assignments, as well as the acquirers of rights related to such concessions who obtain income derived from the alienation or sale of the extractive activity, shall pay annually the special mining duty, applying the rate of 8.5% to the positive difference resulting from reducing such income, the deductions allowed in this article, through a report to be filed before the offices authorized by the Tax Administration Service no later than the last working day of the month of March of the year following the year to which the payment corresponds.

The holders of mining concessions and assignments, as well as the acquirers of rights related to such concessions, shall pay annually the extraordinary mining duty, applying the rate of 0.5% to the income derived from the sale of gold, silver and platinum, through a report to be filed before the offices authorized by the Tax Administration Service no later than the last working day of March of the year following the year to which the payment corresponds.

The holders of mining concessions and assignments, as well as the acquirers of rights related to such concessions, shall pay annually the extraordinary mining duty, applying the rate of 1% to the income derived from the sale of gold, silver and platinum, through a report to be filed before the offices authorized by the Tax Administration Service no later than the last working day of March of the year following the year to which the payment corresponds.

It should be noted that, if the bill under consideration is approved, the reformed Federal Duties Law would become effective as of Jan. 1, 2025.

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