Mexico’s top tax authority said on Tuesday it would impose a one-time tax of more than US$7,000 per year on high-earning people with annual incomes above US$300,000.
The National Tax Agency (ATE) said in a statement that the tax will be imposed on individuals and firms with taxable incomes of more that US$1 million.
The new levy is expected to generate revenues for the government of at least US$6.4 billion ($6.6 billion) over the next 10 years.
The ATE said it will also establish a “supervisory authority” that will oversee tax collection.
It added that it will take into account the country’s “international obligations, economic, financial, social, cultural and environmental conditions.”
The ATO has previously announced the imposition of a 1.5% tax on high incomes in Mexico in 2017 and 2019, but said it would be scaled back due to “increased budgetary requirements and a high demand for the service.”
Mexico has one of the world’s highest taxes on the wealthy, with the country having the highest rate in the world of just under 11%.
The ATD, which is part of the Treasury Department, said the new tax is needed to ensure that taxpayers’ wealth is distributed properly and that taxes are not used to benefit the wealthiest.