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In
a letter to Mexican lawmakers, the groups said the provision was
"inconsistent with Mexican law and trade obligations, would have
a negative impact on the Mexican economy, and is unnecessary to
ensure tax compliance."
The measure could result in "significant blockages to digital
platforms and services," and would violate Mexico's
telecommunications law, a chamber spokeswoman said.
The groups urged lawmakers to remove the clause from the budget
package and suggested alternatives - including a simplified
registration process for tax-paying firms - that would help not
harm the Mexican economy.
They said it would be difficult for non-resident service
providers that do not charge for their services to comply with
what they described as Mexico's "burdensome requirements," which
meant "a significant number" of companies could be blocked.
Mexican lawmakers rejected the same provision in the 2020
economic package, given its expected negative impact on Mexican
small- and medium-sized enterprises (SMEs) that rely on digital
services to store data and connect to customers.
"Blocking those services, including free marketing and
advertising tools, will make it harder for Mexican SMEs to
compete in a global marketplace and will undermine the free and
open internet that is at the core of Mexico’s approach to
digital growth," the groups wrote.
They said the provision was also inconsistent with the
U.S.-Mexico-Canada Agreement (USMCA) that took effect on July 1.
Instead, the Mexican government should work to bolster tax
compliance by making it easier for companies to register with
the government’s tax authority, they said.
(Reporting by Andrea Shalal; Editing by Stephen Coates)
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