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: Myntra

Apparel/Garments | On 3rd Dec 2016

Myntra to be EBITA positive by FY18: CEO Narayanan

Myntra is on track to achieve sustainable growth and be EBITA...

Courtesy: India ITME Society

Textiles | On 3rd Dec 2016

India ITME 2016 opens with over 1050 exhibitors

The India International Textile Machinery Exhibition (India ITME)...

Courtesy: Bruckner

Textiles | On 3rd Dec 2016

Indian textile companies opt for Brückner stenter lines

Indian textile firms Laxmipati Sarees, makers of polyester sarees and ...

Interviews View All

Yash Agarwal
Hitansh Online

Every market region has its own culture and trends

Nuno Venda

‘There has been an increase in demand for water based inks, rather than...

Ghanshyam Ghoghari
Kimora Fashion

Bridalwear is not about reds and whites anymore

Mohammad Hassan
Biax Fiberfilm

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

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

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

December 2016

December 2016

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


Browse Our Archives


Advanced Search