Mexico Tax Authority Seeks To Claim Victory Over Slim’s Payment
(Bloomberg) -- Mexico’s tax authority said it won a victory this week in its campaign to boost revenue from corporations when the nation’s largest company agreed to hand over $8.3 billion pesos ($446 million).
The agency -- known as the SAT -- said it had “invited a leading Mexican telecommunications company” to review its 2016-2019 tax payments.
The company, America Movil SAB, said the payment was related to shifting from one tax regime into another, and wasn’t the result of negotiations with the tax agency. The carrier is owned by Carlos Slim, the nation’s richest citizen.
The government’s announcement on America Movil’s payment followed news that the SAT had made claims of 10.6 billion pesos against Wal-Mart de Mexico SAB and 3.9 billion pesos against Starbucks and Domino’s Pizza operator Alsea SAB over its 8.2 billion-peso purchase of a restaurant chain from Walmex. Those claims extend from a review undertaken in the previous administration, according to two people familiar with the matter.
Facing a weak economy and bound by a pledge not to raise taxes, President Andres Manuel Lopez Obrador’s administration is trying to lift tax collection in a bid to cover spending. Business groups have said they fear a reign of “fiscal terrorism” that could subject them to strong-arm tactics.
The SAT was taken over last month by Raquel Buenrostro, a Lopez Obrador confidant who oversaw an anti-corruption drive in the Finance Ministry. She will now enforce tax reforms from last year that give authorities more power to crack down on evasion, which is rampant in Mexico and blamed for a low tax take.
The agency didn’t immediately reply to written messages seeking comment.
The tax chief says that there’s a wide margin for increasing enforcement and resolving tax claims that will boost government revenue without having to reform the system. Buenrostro estimated that there is about 1.2 trillion pesos ($64.5 billion) currently in litigation, according to Mexican daily La Jornada.
Manuel Aguilar, managing partner at Baker Tilly in Mexico, said in a phone interview that America Movil appeared to have made the payment based on “already established rules”, and that the tax agency was trying to take the credit for a payment that would have happened anyway. There is no evidence yet that the government had implemented a more aggressive strategy to audit major companies, he said.
--With assistance from Justin Villamil.
To contact the reporter on this story: Michael O'Boyle in Mexico City at moboyle7@bloomberg.net
To contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, Matthew Bristow
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