World Economy

Mexico SEZs to Boost Economy in South

Mexico SEZs to Boost Economy in SouthMexico SEZs to Boost Economy in South

Mexican President Enrique Pena Nieto has introduced draft legislation for the creation of special economic zones in the southern states of the country.

The proposed SEZs would be set up in the Isthmus of Tehuantepec and the ports of Chiapas and Lazaro Cardenas. These three areas are located in the states of Oaxaca, Chiapas, and Michoacan, respectively, Tax-News reported.

These SEZs are being created to attract investment, through tax benefits and other business incentives. They are intended to stimulate economic growth in southern Mexico, which is poorer than the rest of the country.

Earlier this year, Lourdes Medina Valdes, a member of the finance committee of Mexico’s Chamber of Deputies, said that the country should focus on creating SEZs as a way of boosting economic growth and employment. According to her proposal, companies operating in the SEZs would benefit from zero-rated value-added tax and exemptions from trade taxes. In addition the income tax rate for individuals would not exceed 12%, and companies would be subject to a rate of not more than 16%.

On February 4, 2015, a delegation from the Mexican government met with officials from the regulatory body of Brazil’s Manaus Free Trade Zone to study the structure of the free zone.

Meanwhile, Mexican Economy Minister Ildefonso Guajardo said last Thursday that negotiators meeting on a Pacific Rim free trade deal were very close to an agreement on autos and auto parts but that a final accord would depend on other elements of the trade deal being discussed in Atlanta.

“We made a lot of progress in the auto issue but still we are pending in a couple of areas where we need to close,” Guajardo said. “We are ready. What we need is everything to fall into place at the same time.”