Home / Knowledge / News / Apparel/Garments / Garment units in Mexico's border regions to pay 16% VAT
Garment units in Mexico's border regions to pay 16% VAT
Nov '13
Garment manufacturing units in Mexico’s border regions would have to pay value-added tax (VAT) at the rate of 16 percent from January 1, 2014, as compared to the current VAT of 11 percent.
It is because Mexico’s Congress has passed a tax overhaul proposal of President Enrique Pena Nieto that would make changes to customs practices and raise the VAT on export assembly plants (known as maquiladoras) in the regions bordering the US.
The VAT increase in the border region states like Baja California Norte, including Tijuana, Rosa Lido, Ensenada and Tecate, will bring the tax in these area at par with the 16 percent VAT currently being paid by the businesses in the rest of Mexico.
The maquiladoras along the US-Mexico border had enjoyed a low tax rate for years, as they were intended to increase competitiveness of these regions with US cities, and thereby attract businesses to Mexico.
The new rules also mean an increase in the retail sales tax along the border, from the current 11 percent to 16 percent, to be effective from January 1, 2014.
The new reforms would especially trouble the Chinese-American garment manufacturers that produce apparel in the border areas between the US and Mexico.
Industry analysts opine that the American firms operating in the border areas might cut-down their operations, but may not move their plants back to the US, although President Barack Obama has outlined proposals to revive American manufacturing sector and bring back jobs to the US.
In 2012, there were 8,750 active apparel companies in Mexico, according to Cámara Nacional de la Industria del Vestido (CANAIVE or National Chamber of the Clothing Industry).

Fibre2fashion News Desk - India

Must ReadView All

Courtesy: BGMEA

Apparel/Garments | On 27th Feb 2017

'Brands & buyers should help Bangladeshi factory owners'

Brands and buyers should come forward to help factory owners in...

Apparel/Garments | On 27th Feb 2017

Myanmar sets up new committee to revise minimum wage

The Government of Myanmar has set up a new committee, replacing an...

Courtesy: PT Indonesia Taroko Textile

Textiles | On 27th Feb 2017

Taiwan's Lealea to buy Tarako textile plant in Indonesia

Taiwan based textile manufacturer Lealea Enterprise Company, one of...

Interviews View All

Varinder Singh Jawanda
Trendy Bharat

Sizing and fitting issues are inherent problems for companies expanding...

Frank Gossmann
Rotorcraft AG

‘RT3 motto is: Do not check millimetres, check colours.’

Karel Williams
Dow Microbial Control

'Silvadur is most rapidly adopted in areas where hygiene-conscious and...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Silke Brand-Kirsch
Schlegel und Partner

Silke Brand-Kirsch, executive partner of Schlegel und Partner, a leading...

Mohammad Hassan
Biax Fiberfilm

About one in every 20 patients picks up an infection while hospitalised....

Sonam & Paras Modi

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies

February 2017

February 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Browse Our Archives


Subscribe today and get the latest News update in your mail box.
Advanced Search