Mexico's fiscal reform may have limited impact on U.S. manufacturers

10/22/2013

Fernando Sedano, Ph.D., economic consultant
On October 17, Mexico's lower house approved a watered-down version of a fiscal bill proposed by President Peña Nieto. While some of the proposals in the original bill would have had a significant effect on U.S. manufacturers by raising their tax burden, this version seems much more benign. U.S. manufacturers with operations in Mexico will see their bottom lines impacted since they will eventually have to pay more taxes, but focusing on just that aspect may be shortsighted. It is important to look at the fiscal reform in the context of the broader reforms being undertaken in Mexico that, if implemented properly, will reduce the overall costs of manufacturing in the country. Issues in Brief

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