Legislation
Mexico – New taxes on gambling proposed by Mexico’s new leftist majority party
By Phil - 5 March 2019
Senators belonging to the left wing party the National Regeneration Movement (MORENA) will put forward an initiative to increase taxes on gambling and change online gambling rules.
“The proposal includes a new tax regime for the organisation of games with bets and raffles, while promoting a growing industry in our country,” the party said in a statement adding that Mexico is the third country when it comes to the casino industry size in Latin America below Argentina and Chile. The new law also seeks to give the central government more say when it comes to establishing tax rates over the industry.
The new taxes would be in the form of an increase in the tax rate of the Special Excise Tax on Production and Services (IEPS). The IEPS tax is imposed on certain products which are deemed harmful in some way to the population or environment such as soft drinks, cigarettes, alcohol and petrol and is already imposed on casinos for which it stands at 30 per cent.
In addition the party is seeking to put in place a new set of taxes and regulations when it comes to the online industry which will include a number of player protection measures. New regulations are needed due the growing popularity of online gambling which need to be brought in line with international standards the party said.
“We believe that the organisation of games with bets and draws has not been taxed in accordance with international practice and that the social costs linked to this activity have not been fully compensated for,” the statement read. In addition increased taxation on the industry would help combat illegal gambling.
The move is especially significant due to the fact that the party pushing for change was founded by current President López Obrador who swept to a landslide victory in the 2018 presidential election. Together with its coalition partner MORENA holds a majority of seats in both houses of Congress.
