Background on the Issue
In April, an intense debate arose when the Mexican government proposed a controversial clause in an amendment to the Telecommunications and Broadcasting Law. The proposed Article 109 would have allowed authorities to block access to digital platforms, sparking concerns about potential censorship and privacy violations.
The Initial Proposal
The Secretaría de Hacienda y Crédito Público (SHCP) and the Servicio de Administración Tributaria (SAT) were behind this proposal. The then-head of the National Digital Tax Archive (ATDT) explained on May 14 that this clause was intended to accompany an existing provision in the VAT Law (Article 18-H) for e-commerce businesses. However, they decided to remove any ambiguity by eliminating the clause.
The Clause’s Removal
Fortunately, the controversial clause was dropped in the senatorial and chamber revisions. Yet, SHCP and SAT didn’t seem satisfied with this outcome.
The New Attempt
In the 2026 Economic Package, specifically within the Federal Fiscal Code, SHCP and SAT have introduced a new provision. They aim to oblige digital service providers, including streaming services like Netflix, Prime, Disney+, ViX, Apple TV, Spotify, and YouTube, to grant continuous online and real-time access to relevant operational information. This information would be subject to regulations set by SAT.
Potential Consequences
Failure to comply with this requirement could result in temporary access blocking to digital services, affecting both domestic and foreign providers. Critics argue that this level of access is unprecedented, lacks international best practices, and grants excessive discretionary power to tax authorities.
International Implications
The U.S. government, under President Trump’s administration, has shown sensitivity towards measures targeting American tech companies abroad. Trump previously expressed his intention to confront countries attempting to impose taxes or regulations on U.S. tech firms. This new move by SHCP and SAT might further strain relations with the U.S., potentially exposing Mexican President Claudia Sheinbaum to criticism from the Trump administration.
Key Questions and Answers
- What is the controversy about? The Mexican tax authorities (SHCP and SAT) are attempting to gain continuous, real-time access to information related to digital platforms’ operations, raising concerns about privacy and potential censorship.
- Why is this a problem? Critics argue that such extensive access is unprecedented, lacks international best practices, and grants excessive discretionary power to tax authorities.
- What are the potential consequences? Non-compliance could lead to temporary access blocking for digital service providers, affecting both domestic and foreign entities.
- How might this impact international relations? The U.S., under President Trump, has shown sensitivity towards measures targeting American tech companies abroad. This new move by SHCP and SAT might further strain relations with the U.S., potentially exposing Mexican President Claudia Sheinbaum to criticism from the Trump administration.
