Mexico and Venezuela Advance New Hydrocarbon Tax Regimes

In Mexico, industry expert Alfonso Reyes Pimentel urged the federal government to create a special fiscal regime for unconventional gas projects such as fracking. He argued that Pemex lacks the financial capacity to invest alone and that a tiered tax system—starting with a low 8 % levy and increasing as projects become profitable—could attract private capital. Current Mexican rules impose taxes like ISR and the Petroleum Welfare Right, with Pemex retaining at least 40 % of profits, but mixed‑contract structures are seen as financially unviable without reforms.

In Venezuela, the government activated a new Integrated Hydrocarbon Tax (IIH) after publishing the regulatory decree. The tax, set at an effective rate of 20‑35 % on the same taxable base as royalties, must be paid into a U.S. Treasury‑administered Foreign Government Deposit Fund due to OFAC General License No. 50. Consequently, the Venezuelan Treasury will not receive the funds directly, and the amount held in the U.S. account remains undisclosed, with estimates ranging up to $13 billion.