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In an effort to cut down on tax avoidance from informal businesses, Mexico’s Tax Administration Service (SAT) will require every Mexican citizen over 18 to register with the Federal Taxpayers Registry (RFC), as outlined by the nation’s proposed 2022 Tax Reform initiative.

While Article 27 of the Federal Tax Code currently does oblige citizens of legal age to register with the RFC, the proposal will add a segment into this article requiring them to do so.

As more than 60 percent of the active economy works in informal businesses, the measure will give the SAT access to an entire new pool of taxpayers once implemented, though many of these citizens unused to paying taxes will likely be concerned about their own potential risks.

“When processing the RFC, the tax mailbox is automatically obtained, and the SAT could use it to send emails and physical letters to new registrants requiring them to pay taxes,” said Isabel Albo, specialist in tax law and partner of the GLZ Abogados law firm.

For his part, Eduardo Revilla, president of the Tax Commission of the International Chamber of Commerce Mexico (ICC Mexico), said the initiative should be helpful in combating the country’s widespread informal business practices.

“If it is possible to have a greater use of the RFC, we could have greater control over what we Mexicans do, considering that more than half Mexico’s citizens do not pay any type of taxes because they are in the informal sector,” said Revilla. 


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