Maquila Association comments on increase of Mexican value added tax

Wednesday, February 12, 2014 - 10:51am

The proposed repeal of tax breaks for Mexican border towns may not be as painful as once thought.

The Maquila Association met in McAllen on Tuesday talked about how the new charges have so far affected business right across the Rio Grande river.

The proposed benefit deduction from workers is much lower than once thought and companies are looking to work around an increase in value added taxes.

Business leaders from McAllen say the Mexican taxes will lead to more sales on our side of the border, but officials form both sides see Reynosa and McAllen as one big city as McAllen EDC CEO Keith Patridge stated, "We have kind of erased the border, locally, and really looked at it from standpoint of what do we do with a city of two million people, that has almost 100,000 manufacturing jobs in it. That's the number of manufacturing jobs that, equals Houston and Dallas."

The value added tax applied to sold goods on the border is going from 11% to the 16% found in the rest of Mexico.

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