Mexico VAT changes

The Mexican budget for 2014 has been approved.  This confirmed that the planned inclusion of foodstuffs in the VAT net would not go ahead.

The new government had been keen to extend the Mexican VAT net to raise revenues and balance federal receipts.  Mexico is heavily dependent upon oil receipts.  However, opposition to adding foodstuffs to VAT was successful.

The only major VAT changes that did survive, and come into effect on 1 January 2014 are:

• The scrapping of the 11% reduced VAT rates for the 10 mile US border zone.  The region will now be subject to the standard 16% Mexican VAT rate
• Pet food will now be subject to VAT at 16%.