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Company News

Mexico's tax prosecutor says two large firms face criminal charges

MEXICO CITY, Oct 1 (Reuters) - Two big companies in Mexico face possible criminal charges over taxes after they failed to reach agreements with authorities, a top prosecutor said on Thursday, as officials seek to stop corporate tax evasion with threats of jail time.

“Two (companies) are now in the criminal process, and decided to go the long way,” fiscal prosecutor Carlos Romero said in an interview, declining to name the firms.

His office had also considered bringing charges against two other companies that initially did not meet tax obligations but later paid, he said.

Mexican officials have reported higher tax receipts from large companies this year despite the coronavirus crisis, amid a drive by President Andres Manuel Lopez Obrador to boost collection in the country that has the lowest tax take in the Organisation for Economic Co-operation and Development.

Romero said the Attorney General’s office is reviewing the criminal complaints ahead of presenting formal charges, a process that has been delayed by the pandemic.

“We’re pressuring for (the charges) to come out as soon as possible,” he said.

Romero estimated rulings in the two cases could take a year and a half. For the time being, the companies have missed the opportunity to reach a deal, he added.

“There’s no (negotiating) table with them,” he said. “If we have a unfavorable ruling for them, one of the sanctions is payment of damages, and the other, jail.” Top executives and their tax attorneys could be imprisoned.

Walmart Inc’s Mexico unit and Coca-Cola bottler Femsa recently paid authorities hundreds of millions of dollars after resolving tax disputes.

Last week, the head of the tax authority (SAT), Raquel Buenrostro, said tax officials have reviewed 627 large companies so far this year but have more than 11,000 others pending. (Reporting by Daina Beth Solomon; Editing by Cynthia Osterman)

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