News Business Tax Uncertainty in Mexican Market

Tax Uncertainty in Mexican Market

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Gambling operators in Mexico who have been preparing for the country’s new gambling industry tax rules, have been left in a state of confusion after remarks by the Mexican government.

The ruling Morena party has proposed a new tax framework, modifying the existing rules contained in the Federal Law of Games and Sweepstakes (LFJS). But Morena politician Emmanuel Reyes Carmona has caused confusion over the detail of the proposed changes.

The Mexican media reported that the government was intending to introduce an additional 20% excise duty increase for all online gambling business. But this may not be an accurate reflection of the plans as it appears that Carmona’s statement could have been misreported.

The current tax rules in Mexico do not draw a distinction between land-based gambling or the online alternative, and both have a 30% tax levy. But Carmona’s statement suggested that the government would bring in new tax provisions that would put online gambling on an equal footing with other parts of the Mexican industry. Some parts of the media interpreted this as an additional tax on online gambling, but it appears that the Morena’s proposals are for a reduced only tax rate of 20%.

According to the details of the proposal, the government intends to modify elements of the current tax code to encourage more use or online casinos, while at the same time improving oversight and offering betting player protection for online casino and sports betting customers.

But despite the potential drop in online gambling tax, many operators in Mexico remain unenthusiastic about the planned reforms. Some have complained that the cuts to tax rates will only affect a sector of the industry and will therefore have a limited impact in boosting the Mexican sector.

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