Mexico President Andres Manuel Lopez Obrador on Monday said, the government is decreasing tax cuts for its northern states like the United States that he claimed to help power economic growth and warned migration to the US.
According to news reports, an executive order in the official gazette of government has granted a lower rates for both the income taxes and value-added in more than 40 municipalities which borders the US, an area which is a flash-point over the US President Donald Trump’s policies to threaten immigration, including building US-Mexico border wall.
The proposal by Obrador of tax cuts could reduce the government tax income during this new year. The new implementation of budget would seek to use the spend cuts to help funding new infrastructure projects and social welfare.
During an event on Sunday, in Monterrey in the northern state of Nuevo Leon, Obrador said the northern strip of municipalities’ minimum wages would rise to $9.00 (177 pesos), and also the fuel prices would be set up on a par with the US prices.
According to reports, Lopez Obrador said: “This is a very important project to boost investment and job creation.”
The proposed plan would give businesses a tax credits in the region worth 50 percent of VAT dues. Lopez Obrador has also vowed increasing economic development to warn migration to the United States
In an official statement, PAN leader Marko Cortes said the VAT tax cuts would be only beneficial to “intermediaries”, and also the it would fail to enhance investments – a presidential decree, which could get moved at any moment.