Global Affairs Canada described several of the challenges facing Mexico‘s mining industry in terms of taxes, safety and regulations.

The value of Mexico’s mining and metallurgical production was 261 billion pesos. This amount fell 17.6% year-on-year, according to Camimex data.

In U.S. dollar terms, the same value was 14.7 billion pesos, 6.5% less than the annual rate.

Mining industry 

Global Affairs Canada points out that Mexico’s fiscal framework represents an obstacle to attracting investment in the mining industry, as it imposes a significant burden on foreign investors due to the government’s stance towards this activity. In particular, the non-deductibility of exploration expenditures continues to negatively impact companies engaged in this key stage of the sector.

In addition, security is another critical challenge. The presence of drug cartels in regions with significant mining investments has led to the suspension and closure of projects, affecting the viability and development of the industry.

Other challenges from the Canadian government’s perspective relate to new measures limiting environmental social impacts and excessive red tape.

Tax burden on mining

For the fiscal year 2025, the Mexican government proposed to Congress to increase mining duties in the Federal Revenue Law initiative.

The Ministry of Finance proposed to increase the special and extraordinary mining duties from 7.5% to 8.5% and from 0.5% to 1%, respectively.

At the end of 2013, a new Mexican Income Tax Law was enacted and became effective on January 1, 2014. 

The key provisions of the Mexican Tax Reform consist of:

• New mining royalty of 7.5%.
• New environmental tax of 0.5% of gross income from the sale of gold and silver.
• The corporate income tax rate will remain at 30%, eliminating the planned reduction to 29% in 2014 and 28% in 2015.
• Elimination of IETU.
• Reduction of the deductibility of various employee fringe benefits.
• Elimination of the accelerated depreciation option for capital assets.
• Elimination of 100% of the deduction of exploration costs for the location and quantification of new deposits in pre-operating periods. These exploration costs will be amortized on a straight-line basis over 10 years.