The Structural Reforms in Mexico
By Prof. Dr. Sergio Guerrero Rosas, Guerrero y Santana, S.C.
Interview with the Federal Deputy representing the 10th electoral district of the State of Jalisco, Omar Borboa Becerra, on the structural reforms being implemented in Mexico. These reforms are surely of great importance to all foreign investors interested in taking advantage of business opportunities.
Sergio Guerrero Rosas: Why Politics?
Omar Borboa Becerra (foto): Because it is a medium that allows great changes which benefit society to be accomplished.
Sergio Guerrero Rosas: How did you become a federal deputy?
Omar Borboa Becerra: Through my work with the people. Working in the streets, close to the population has twice allowed me to reach the Chamber of Deputies.
Sergio Guerrero Rosas: What are the challenges you generally face as a representative of the people?
Omar Borboa Becerra: One of the big challenges is to be able to keep the topics important to the people in the legislative agenda, despite the distance from the Chamber of Deputies to the district I represent.
Sergio Guerrero Rosas: Who is the political figure you most admire?
Omar Borboa Becerra: On an international level, I deeply admired Nelson Mandela. His tireless struggle for large-scale transformations in his country, in defence of people's rights, is a great example of the kind of work that those of us who work in politics should carry out.
On a national level, I consider Diego Fernández de Cevallos to have been an example of the effort to defend society's interests from legislative power.
Sergio Guerrero Rosas: What has most surprised you since you became deputy?
Omar Borboa Becerra: The lack of social interest in public matters has been both surprising and disappointing.
Sergio Guerrero Rosas: What is your advice for the new generation of Mexicans who wish to work in politics?
Omar Borboa Becerra: To make the effort so that they achieve their objectives and to never lose sight of their ideals.
Sergio Guerrero Rosas: What are the biggest changes you have witnessed in the Mexican economy since the last elections?
Omar Borboa Becerra: Great changes will come as a result of the tax reform, and these are about to become visible. This reform is detrimental for the national economy, especially for the country's middle class.
Sergio Guerrero Rosas: What should foreign investors consider with regard to Mexican structural reforms?
Omar Borboa Becerra: They should take into account that those reforms, as a group, approved throughout the current federal legislature, will strengthen national institutionalism, guaranteeing better conditions for the country's development.
Sergio Guerrero Rosas: What are the consequences of the main reforms in the energy sector for multinational companies?
Omar Borboa Becerra: With the energy reform, there will be more development in that sector for the benefit of citizens, in which multinational companies will be able to collaborate.
Sergio Guerrero Rosas: How will the world's biggest energy sector companies be affected or interested?
Omar Borboa Becerra: They will be able to collaborate more effectively in the sector, always to the benefit of Mexicans and with respect for the national resources.
Sergio Guerrero Rosas: What have been the main reasons for implementing these energy and tax reforms?
Omar Borboa Becerra: The urgent need to modernise the national energy sector is the origin of the energy reform.
The tax reform amendments were made as a result of the need to increase tax collections.
Sergio Guerrero Rosas: Talking of the tax reform: what has been the reaction of the manufacturing and mining companies?
Omar Borboa Becerra: Those companies have expressed that the reform could have been more beneficial for their sectors.
Sergio Guerrero Rosas: In your opinion, will the tax reform help fight the informal economy?
Omar Borboa Becerra: The reforms in tax matters should, among other things, seek to strengthen formal commerce in such a way that it guarantees better employment opportunities for those in the informal sectors; the recently approved reform does not do that.
Sergio Guerrero Rosas: Why should an American or foreign company be interested in investing in Mexico?
Omar Borboa Becerra: Because of the economic stability the country has had in recent years, and because the recently approved structural reforms guarantee national development.
Sergio Guerrero Rosas: How will the new tax on sodas and candies affect the national market?
Omar Borboa Becerra: This tax, if accompanied by well-designed public policies to combat obesity and diabetes, will contribute towards tackling these problems, which are two of the biggest public health issues faced by Mexico.
Sergio Guerrero Rosas: Will it help reduce obesity indices in children?
Omar Borboa Becerra: As long as these resources are used to fund government programmes that encourage healthy eating and increased physical activity, it could.
Sergio Guerrero Rosas: Concerning the "IVA" (Value Added Tax) reform in the border region, do you estimate that it will have an inflationary effect?
Omar Borboa Becerra: I believe it will. National conditions are different in each region, and it is important that both legislation and public policies include a vital dose of contextualisation in order to achieve their objectives. On the specific topic of IVA in the border region, the legislation is not adapted to its implementation context; competitiveness decreases in comparison with American cities.
Sergio Guerrero Rosas: Finally, where would you recommend that someone go if they are visiting Mexico for the first time?
Omar Borboa Becerra: Guadalajara and its metropolitan area. It is one of the most beautiful cities in the country and it has many of the cultural features that most represent the nation.
Sergio Guerrero Rosas: Thank you very much.
The questions were posed by Prof. Dr. Sergio Guerrero Rosas.
Prof Sergio Guerrero RosasGuerrero y Santana, S.C., Tijuana, Baja California, Mexico
T: : +52 333 120 05 38
Guerrero y Santana S.C. provides its clients with a wide range of tax, legal and consulting services. The firm makes comprehensive evaluations of its clients’ businesses and draws on the expertise of its professionals to offer the best solution available.
Prof Sergio Guerrero Rosas, Managing Director at Guerrero y Santana, has over 25 years’ experience advising companies from SMEs to multinationals, as well as individuals, on tax and estate planning. He is also the Latin American Chairman of International Taxation Practice Group and Global Vice Chairperson of the Trust & Estate Planning Practice Group.
published: January 2014