New Mexican Government Measures
To Our Clients and Friends:
Please be advised that this week Marcelo Ebrard nominated by virtual President Elect Andres Manuel Lopez Obrador as the next Mexican Ministry of Foreign Affairs when Mr. Lopez-Obrador takes office as of December 1, 2018, made some important announcements, which deal with the following:
· The locations of Mexican Customs checkpoints will be changed inland from 20 to 30 kilometers from the border dividing line;
· In Mexico, within the border region, income tax will be reduced to 20%;
· The Value Added Tax will be reduced to 8% average (It is now 16%);
· Specifically, in border cities VAT will apply at the same rate as on the US side; that is, in California they charge 8.5%, in Arizona 8.2%, in New Mexico 7.5% and in the border with Texas 8.2%;
· In the border region, special taxes on production and services will be reduced. Prices of gasoline, diesel and electricity will be the same as the ones in the United States border states;
· As of January 1st , 2019 in the entire border area the minimum salary will be increased at least to double of what is currently stipulated (currently MX$88.36 pesos). According to Mr. Ebrard, It is a matter of justice and without risks of inflation because there will be reduction of taxes and energy prices; and
· In all border cities a comprehensive urban development plan will be carried out that will include land use planning, the introduction of drinking water, sewer, paving of streets, construction of nurseries, homes, sports units, cultural spaces , schools and hospitals and other works and services
We will keep you informed on further developments as they become available.
Ernesto Velarde Danache, Inc.