Can PRODECON remain an independent counterweight? The keys to its potential sectorization

Executive Summary:

• Since its creation, PRODECON has played a relevant role in protecting taxpayers' rights and as a mediation body with tax authorities.
• Currently, a proposal is being analyzed to incorporate it into the Secretariat of Anti-Corruption and Good Governance, which would modify its location within the Federal Public Administration.
• The article analyzes the scope of this proposal and its possible implications for the functioning, independence, and institutional role of PRODECON.

1. PRODECON: the effects and consequences of its sectorization

A draft reform has recently been promoted so that the Office of the Attorney for the Defense of the Taxpayer (PRODECON) ceases to be a decentralized, non-sectorized public body and, consequently, depends on a State Secretariat of the Federal Government.

First, it's important to understand that the Office of the Attorney General for Tax Matters, since its incorporation into the Federal Tax Code and the enactment of its Organic Law, was conceived as a decentralized, non-sectoral public body with technical, functional, and administrative autonomy. This was intended to serve as a counterweight to federal tax authorities through extraordinary procedures for safeguarding taxpayers' rights and, subsequently, as a mediator between the tax authority and the taxpayer in the conclusive agreement procedure.

In recent years, we have seen the powers of tax authorities strengthened and expanded. Furthermore, the Federal Government recently introduced a reform to incorporate PRODECON into the Secretariat of Anti-Corruption and Good Governance; that is, it would cease to be a non-sectoral public body and become part of a cabinet-level Secretariat.

Therefore, it is important to analyze the effects and consequences that this sectorization will have on taxpayers, whether individuals or businesses. That is, to determine if PRODECON will lose its autonomy, if its powers will be affected, or what implications this reform could have on the defense of taxpayers' rights.

2. PRODECON. Birth and evolution

As mentioned, PRODECON was conceived as an autonomous body to provide a counterbalance to the tax authorities, thereby protecting taxpayers' rights against any violations by said authorities. In this context, it was created as a ombudsman The Attorney General's Office was an independent prosecutor from the Federal Government, because although it depended on the public administration for budgetary purposes, its technical and managerial autonomy from the Government itself quickly made it a key player in the national tax arena. So much so that the head of the Attorney General's Office, structurally, had no hierarchical superior and was not even appointed directly by the Federal Executive, but rather through a shortlist presented by the Executive, with the Senate making the final selection from among the various candidates; in other words, there was no direct interference from the Executive branch.

The incorporation of PRODECON into the federal tax system generated a positive impact for both taxpayers and tax authorities, as its procedures opened an impartial space to discuss and address both systematic tax problems and highly complex disputes, whether through its initial procedures, such as complaints, advice, legal representation, systemic analyses and specialized consultations, among others.

The trust and respect that PRODECON obtained within the legal field as a specialized tax body even led to the expansion of its substantive powers in 2014 through the incorporation into the Federal Tax Code of an unprecedented figure within the Mexican legal system, namely, the conclusive agreement, which constituted the first alternative means of resolving disputes in tax matters, in which PRODECON would act as the impartial director of the mediation procedure during an audit.

This procedure has so far yielded positive results for both tax authorities and taxpayers, as it has allowed for the resolution of highly complex disputes without resorting to lengthy and costly legal proceedings. This has resulted in benefits for taxpayers, such as the waiver of penalties and the possibility of early conclusion of audits, and for tax authorities, it has enabled the collection of corresponding taxes in less time and without the need to exercise their enforcement powers.

The PRODECON model was even replicated in various federal entities of the country, creating state Attorney General's Offices with a structure and functions similar to those of the Federal Attorney General's Office.

Therefore, in summary, we can point out that PRODECON, which began operations and opened its doors to the public on September 1, 2011, even though it is a relatively young organization, has had a decisive and positive impact within the Mexican tax system.

In this context, it is necessary to ask: Is the sectorization of PRODECON really necessary? What benefits or consequences could this modification generate?

3. Sectorization of the autonomous body

To understand the effects of sectorization, it is first necessary to analyze the modifications proposed by the Federal Executive, which are presented through two different instruments.

The first consists of the “Agreement issuing general criteria and operational guidelines of an orienting nature for the promotion of productive investment and tax compliance”, published in the Official Gazette of the Federation on May 4, 2026[1], which establishes various general guidelines on tax matters, mainly regarding the exercise of the verification powers of the tax authorities, with the aim of promoting investment and, in turn, compliance with tax obligations by taxpayers.

In the relevant section, the final point of the Agreement specifies that PRODECON will be strengthened through mechanisms that improve its coordination with federal government agencies. This point is significant, as it represents the first step toward the sectorization that is intended to be implemented.

Now, the second means by which PRODECON is intended to be sectorized was published on June 3, 2026[2], through a draft initiative prepared by the Federal Executive to reform its Organic Law, as well as the Federal Law of Parastatal Entities, legally grouping it under the Secretariat of Anti-Corruption and Good Governance.

Additionally, the main objectives of this draft bill are to modify and regulate the following aspects:

• Strengthen the functioning of PRODECON and improve its control and accountability mechanisms.
• To standardize its oversight bodies and its internal control body.
• Update the mechanism for appointing its head, so that they are appointed directly by the President of the Republic and ratified by the Senate.
• Adjust the powers of the holder in accordance with the new sectorization scheme that is proposed.

To date, the aforementioned draft initiative is pending its formal presentation to the Congress of the Union.

4. Consequences of sectorization

As we have analyzed, a first reading of the draft bill reveals two elements that could have significant repercussions on the functioning of PRODECON. The first is the direct appointment of the head of the Office of the Ombudsman by the President of the Republic, subject to ratification by the Senate. While it is common for the heads of various government agencies to be appointed directly by the Federal Executive, the previous model specifically aimed to avoid a direct relationship of subordination to the Executive. By presenting a shortlist of three candidates (although all the profiles could be aligned with the current Federal Government), the goal was to generate a greater diversity of profiles and allow the Senate, through its members, to choose the person it considered best suited for the position.

Additionally, sectorizing PRODECON and making it dependent on a government ministry could lead to a loss of perceived impartiality in the cases handled through its various procedures. This is because it is evident that another government ministry, such as the Ministry of Finance and Public Credit, is a party in virtually all the proceedings in which the Taxpayer Advocate's Office is involved. Under this logic, it could even be argued that PRODECON becomes "judge and jury," diminishing the trust and prestige it has built over more than a decade among taxpayers and the various stakeholders in the national tax system.

However, I believe it is worthwhile to read the fine print of the draft reform. That is to say, while these changes may seem substantial and represent a significant shift in the role PRODECON has played within the Mexican tax system, it is also true that both the explanatory memorandum and the text of the draft bill expressly preserve its technical, functional, and administrative autonomy. This means that, if the reform is implemented correctly, it could, in principle, maintain the autonomy and impartiality that it has worked so hard to build within the Mexican tax system and, indeed, strengthen PRODECON from an administrative and budgetary standpoint. Furthermore, the substantive powers of the Office of the Ombudsman and its head essentially remain unchanged.

Additionally, because it is part of a State Secretariat, according to the reform itself, its budget proposal will be prepared by the Attorney General's Office itself and will be executed by it once approved; that is, it will not depend budgetarily on the Secretariat of Anti-Corruption and Good Governance, which means that, if this is applied correctly, PRODECON will be able to preserve its autonomy in general terms.

Therefore, we can conclude that, beyond the reform itself, much will depend on how it is implemented for PRODECON to continue exercising its substantive powers in a truly autonomous manner and to continue fulfilling the role that gave rise to it: to be a counterweight within the tax system, an impartial mediator between authority and taxpayer, and a genuine protector of taxpayers' rights. In other words, technical, functional, and management autonomy depends not only on the text of the law, but also on the material independence with which the Head of the aforementioned Office exercises his functions.

[1] https://www.dof.gob.mx/nota_detalle.php?codigo=5786601&fecha=04/05/2026#gsc.tab=0

[2] On the Comprehensive Regulatory Governance Platform of the Government of Mexico at the following link:  https://www.herramientasregulatorias.gob.mx/AirConstancia?IdAir=1101&tab=tab1&utmThe strategy to resolve a dispute is not the one designed when the conflict already exists, but the one that is built from the negotiation of the contract itself.