Structural Reform of Mexico’s General Import and Export Tariff Classifications (TIGIE)

By Edmundo Elías and Marisol de León

Currently, Mexico’s Department of the Economy is in the process of a comprehensive and structural reform of the TIGIE. This reform is based on the following criteria:

 

  • Tariff classifications that, due to their complexity, are seldom used.
  • About 40% of current tariff classifications have an annual total amount of trade transactions of less than one million dollars.
  • Some tariff classifications that were designed without a reasonable criterion, such as classifications created for statistical purposes only, which ultimately hinder trade.

 

Therefore, the reform seeks to:

 

  • Harmonize the TIGIE with the Harmonized Tariff Schedule of the United States (HTSUS), Mexico’s main trade partner.
  • Eliminate unused or underutilized tariff classifications.
  • Create a database and reserve of statistical information.

 

Unlike more recent reforms to the TIGIE, in which specific tariff classifications had been included or eliminated, the new reform is structural in nature. In addition, a public consultation process was conducted in which citizens were allowed to participate with their comments and opinions as to tariff code classifications and item descriptions, but not on import and export tax rates.

 

The draft reform is subject to approval by Mexico’s Congress. Therefore, it is likely that such will be addressed during the second term of congressional sessions (September 2017 – December 2017).

 

If the Congress approves the proposed reform, it will be published in the Federal Official Gazette. It is expected that the publication will provide a reasonable time frame for its entry into force. In addition, such time will allow for a complete implementation, including the potential need to modify many related Mexican laws and regulations.

 

We suggest that all clients and interested parties remain aware of publications and updates on the proposed reform, and that importers and exporters prepare to carry out necessary actions in order to implement such expected changes.