On June 10, Mexican President Enrique Peña Nieto signed a constitutional amendment to spur greater competition in the telecommunications market that is dominated by Telcel, a company owned by Carlos Slim.
“This reform will promote greater competition, more and better conditions, better coverage and service quality, as well as lower prices and costs,” Peña Nieto said at an event in Mexico City with government officials and telecoms industry executives.
The legislation, approved by Congress, transformed the government´s role in telecommunications and expanded its power to curtail media monopolies. It created the Federal Telecommunications Institute, IFETEL, which will be independent from the executive and legislative branches, and will function as telecom sector´s exclusive anti-trust agency.
IFETEL will have the power to impose sanctions against companies that break the law.
The telecom reform also mandates that the federal government set up a nonprofit, public service broadcast company to rpoduce independently produced content.
On August 2014, eight months after constitutional amendments were introduced to reform Mexico´s oil and gas electricity sector, Enrique Peña Nieto finally signed energy reform bills approved by the Mexican Congress. The reforms are focused on opening those sectors to foreign private sector actors to bring new investment and capability. Internationally, the legislation was considered a historic step.
The reform ends the monopoly enjoyed by two national companies, PEMEX, the national oil company, and CFE, the national electricity company. It opens up new opportunities for national and foreign investment across the industry.
Peña Nieto has estimated the new encompassing framework will successfully attract $50.5 billion of investment for exploring, producing and refining oil in Mexico by 2018. International oil companies such as Royal Dutch Shell and ExxonMobil have been monitoring the legislative process and are expected to compete for newly established development contracts by 2015.
On the last month of 2013 in Mexico approved the 2014 Mexican tax reform package. The reforms will have a substantial impact on the companies doing business in Mexico.
The tax reform included the creation of a universal pension program to provide pensions to people over 65 years old. The pension plan will be funded by the federal government. There will also be unemployment insurance which will be funded by contributions made by employers and employees. The government estimates that 7.8 million citizens would benefit from the pension plan in 2018.
One of the most controversial points of this reform was an increase to the value added tax (VAT) across the country, affecting Border States which until then had had only an 11 percent VAT. A 16 percent VAT rate is now applied uniformly throughout the country.
Punitive measures were also introduced. For example, if a taxpayer cannot be located, the authority may freeze his bank accounts.
The legislation focuses on reasserting government control by introducing a yearly national standardized test for all teachers and teacher candidates. Only those who pass the test will be given teaching positions, and current teachers who fail the test may lose their positions. The reform has angered the National Coordinator of Education Workers (CNTE) because it removes the hiring and firing control they used to wield which allowed them to select and name candidates for teaching positions throughout the country.
Teachers who are currently working for the system will be given three opportunities to pass their first annual performance test. Those who fail it will be reassigned to administrative jobs or be given the change to retire.
The reform ends old corrupt practices that had dominated the teaching profession in Mexico, such as the transfer of teaching positions from parents to children, and the sale of teaching spots for financial gain. These practices are blamed for the corrosive impact they had on the Mexican education system. According to the Organization for Economic Cooperation and Development, OECD, Mexico spends a greater share of its public budget on education than any other state member of the group. Most of the expenditures go to staff compensation.