The Mexican border with the United States will be a Free Zone starting next January 1, after the Mexican government decreed fiscal incentives for that region in search of attracting investments.
In signing the “Decree of Fiscal Incentives for the Northern Border Region,” President Andrés Manuel López Obrador said that it will be the largest Free Zone in the world because it covers 43 municipalities that are along the almost 3.200 kilometers of the northern border.
Free Trade Zone Points
"It means that in a 25-kilometer strip of the dividing line inland, inland from our territory, that whole strip, it will be the largest Free Zone in the world.", said the president during the ceremony in the northern and industrial city of Monterrey.
The decree provides for a reduction in the Value Added Tax (VAT) rate from 16% to 8%, and the Income Tax (ISR) rate from 30% to 20%, in the strip that runs from the Pacific coast to the Gulf of Mexico.
Fuel and electricity prices will be standardized at the cost in border states of the United States, in addition to the fact that the daily minimum wage will be 176 pesos (US$8,9), an amount higher than that of the rest of the country.
"It is a very important project to boost investment and jobs, and take advantage of the economic strength of the states of the American Union. That is what this program is for," said López Obrador.
The northern region has an export platform which generates 59% of all Mexican exports, qualified labor and connectivity, said the Secretary (Minister) of Economy, Graciela Márquez.
"What is the logic behind these fiscal incentives and an increase in the minimum wage? It is to attract investment and create jobs, more well-paid jobs," said Márquez.
According to the government, the Free Zone is part of a plan to create "development curtains" in the southern, central and northern regions of the country in search of boosting economic growth and generating better jobs that inhibit the migration of Mexicans.
Source: with information from Xinhua
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