Mexico’s Lower House of Congress (Cámara de Diputados) has approved a draft constitutional reform proposing to make the effects of judicialdecisions in Amparo tax lawsuits that are filed to attack the validity of a tax law that has broad general effect to all taxpayers; that is, decisions whichapply to all tax payers without the necessity of such individual taxpayers filing their own amparo tax lawsuits in order to be treated in accordance withthe results and effects of the decision of Mexico’s Supreme Court in such tax law cases. The amendment seeks to deal with the large accumulation oftax cases currently pending in federal courts given that, practically every year, taxpayers present amparo lawsuits against new tax laws and regulations.This practice has proliferated and caused high administrative costs to the Mexican federal judiciary. The constitutional reform initiative, which has notbeen approved by Mexico’s Senate or by the state legislatures throughout the Mexican Republic, also provides that amparo tax lawsuits will in all casesbe resolved by Mexico’s Supreme Court, and not by other federal courts, including federal district courts and Collegiate courts (TribunalesColegiados). Finally, the proposed reform provides that during the time the amparo tax lawsuit is being prosecuted, the taxpayer must pay the protestedtax, which will not be refunded unless the taxpayer wins the amparo tax lawsuit. The results of a decision would take effect as of the date the court’sdecision is issued.The proposed reform has, in our view, positive and a negative aspects. On the positive side, providing that decisions in amparo tax lawsuits will applygenerally to all taxpayers will achieve the goal of increasing the efficiency of the constitutional process, avoiding the extremely high cost to Mexicanfederal courts and the expense of attorneys and processing time of amparo cases. In other countries, providing for general application of judicialdecisions has proved to be a positive aspect. However, and unfortunately, the negative effects overshadow the positive points mentioned above, giventhat the concentration of these cases in Mexico’s Supreme Court will negatively affect and impact the independence and autonomy of the districtjudges and Collegiate court magistrates who traditionally have been the judges that have protected taxpayers against abuses by Mexican tax authoritiesand the Executive Branch officials seeking to apply unjust tax laws or rules that are contrary to principles of tax justice. In addition, the requirementthat taxpayers must pay the protested tax that may eventually be declared unconstitutional is highly unjust. This case could be considered as aconstitutional reform that in itself becomes unconstitutional. It is not known whether Mexico’s Senate will approve the proposed constitutional reform.In our estimation, it would be possible to preserve positive elements of the proposal and eliminate the negative effects mentioned herein, which wouldbenefit the fiscal equilibrium between Mexican tax authorities and Mexican taxpayers.
