The Mexican government has seen through dramatic changes in Mexico's taxation system and continues to adjust the system in order to be competitive with other nations. The majority of the direct taxes come from the federal government in the form of income taxes. They are broken down into resident and non-resident status taxation.

Resident taxation is based on worldwide income, regardless of the person's nationality, and is based on a sliding scale that climbs to 35 percent.

Non-residents - both individuals and corporations - are taxed on their Mexican income only, and that is done at a flat rate depending on what type of income it is.

In addition to income taxes, Value Added Tax is calculated at 10 percent, but this is not charged on certain medicines and food.