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Mexico To Use SEZs To Boost Economy Of South

by Mike Godfrey, Tax-News.com, Washington

07 October 2015


Mexican President Enrique Peña Nieto has introduced draft legislation for the creation of special economic zones (SEZs) 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 Lázaro Cárdenas. These three areas are located in the states of Oaxaca, Chiapas, and Michoacán, respectively.

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

Earlier this year, Lourdes Medina Valdés, 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 (VAT) and exemptions from trade taxes. In addition the income tax rate for individuals would not exceed 12 percent, and companies would be subject to a rate of not more than 16 percent.

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.

TAGS: individuals | Finance | tax | investment | economics | business | tax incentives | export duty | fiscal policy | tariffs | Mexico | legislation | Brazil | tax breaks | import duty | trade | free trade zone

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