Mexico Tax changes said to be presented with secondary oil bills

4/30/2014

Mexico tax changes said to be presented with secondary oil bills

NACHA CATTAN and ADAM WILLIAMS

CIUDAD DE MEXICO (Bloomberg) -- Proposed changes to the tax structure of Pemex will be included in secondary energy legislation President Enrique Pena Nieto will send to congress by today, two people familiar with the bill’s contents said.

The legislation needed to implement the energy law passed last year will contain legal changes to the tax regime of Pemex and private oil companies, according to the people familiar with the bill. The secondary legislation will include details on the contract structuring of private energy companies that establish operations in Mexico.

Mexico passed landmark legislation last year to allow for private companies to enter the country’s energy industry for the first time since 1938. The government assured that passage of the law would be paired with additional legislation to reduce the tax burden of Pemex, which currently funds a third of the state’s annual budget.

The portion of the energy bill covering taxes for both Pemex and private company contracts won’t be ready before September and will probably be debated along with the 2015 budget, Institutional Revolutionary Party Senator Enrique Burgos said in interview in February.

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