Canada's First Majestic taps diplomat to resolve Mexico tax dispute

15th June 2020 By: Reuters

First Majestic Silver has asked Canada's ambassador to Mexico to intervene in an escalating tax dispute with President Andres Manuel Lopez Obrador's government, the Canadian miner's CEO said on Friday.

Lopez Obrador said on Tuesday that some of Canada's mining firms were behind on their tax payments and urged the Canadian government to lean on them to avoid the dispute reaching international tribunals.

He did not mention First Majestic by name, but the miner last month said it had served notice to Mexico's government under its North American trade treaty obligations to begin talks to resolve taxation disputes.

"We've been trying to get somebody to the table to finally put this behind us," First Majestic CEO Keith Neumeyer told Reuters.

The miner wrote to Canadian ambassador Graeme Clark this week and is hoping to set up a meeting with Lopez Obrador, Neumeyer said.

The Vancouver-based company, which owns several mines in Mexico, disputes reassessments issued by Mexico's tax authority totaling $209.2-million, filings show.

Lopez Obrador has made cracking down on tax breaks a priority. Several major companies, including the Mexican unit of US retailer Walmart Inc and Mexican conglomerate Femsa, have recently agreed to make tax payments to Mexico.

Neumeyer said the company had proposed three settlement offers since 2018 before launching the trade challenge last month.

"Each of the offers has been rebuffed," he said, declining to provide details.

The tax authority, Servicio de Administracion Tributaria, could not immediately be reached.