Modification to the TIGIE: Temporary tariff exemption to encourage the Automotive Industry in Mexico.

The Ministry of Economy published, in the Official Gazette of the Federation, the modification to the Tariff of the Law of General Import and Export Taxes (TIGIE), implementing a key measure for the automotive sector within the framework of the “Plan Mexico” strategy.

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Context and Objectives of “Plan México”

The Federal Government seeks to attract and install in the country new production lines for light vehicles that are currently imported from other markets.

  • Transition from assembly to manufacturing: The establishment of a complete automotive infrastructure requires long periods of planning and supplier development. Therefore, the measure allows taking advantage of the existing infrastructure to start with simple assembly processes and gradually scale towards integral manufacturing.
  • Global competitiveness: It allows companies in the terminal industry to maintain their competitiveness and complement their offer in the domestic market

Action Taken: Tariff Exemption

Currently, TIGIE tariff item 9803.00.01 is subject to an ad valorem import tariff of 10 per cent, which represented an obstacle to attracting new assembly projects.

  • Benefit: Temporary exemption of 0% import tariff for goods of fraction 9803.00.01.
  • Target audience: Measure focused exclusively on companies in the terminal automotive industry that have:
    1. Authorization of a bonded warehouse for the assembly and manufacture of vehicles.
    2. Compliance with the guidelines issued by the Ministry of Economy.

Expected Impact on the Sector

  • Reduced installation and operating costs for new projects.
  • Generation of specialized employment and technology transfer.
  • Strengthening local content and regional value chains.
  • Strategic import substitution.

Said modification was finalized as follows:

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Validity

This Decree will enter into force on the day following its publication and will remain in force for 5 years.

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