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Higher Mexican Taxes Not Seen as Boost to US Retail Sales

Higher Mexican Taxes Not Seen as Boost to US Retail Sales

The decision by the Pena Nieto Administration in Mexico City to nearly double the Federal Republic's Value Added Tax in border counties won't be the boost to Texas border merchants that many had hoped, 1200 WOAI news reports.

 

  The move is an effort to wean Mexico away from dependence on oil revenues to raise money, and to raise money for infrastructure projects which are needed to create jobs and cripple the drug gangs which offer employment to young people in Mexico's northern states.

 

  Fro decades, Mexico's border states have collected only an 11% Value Added Tax.  On January first, that rate jumps to 16%. the same as the rate for the rest of Mexico.

 

  But Monica Weisberg-Stewart, w border store owner and a leader of the Texas Border Coalition, says the security in place that would be shoppers need to get through to come into the U. S. will dissuade many people from making the trip across the Rio Grande and buying items in Texas to avoid the tax.

 

  "Because of the documentation that people need to get, it's not going to be like it was in the olden times," Weisberg-Stewart said.

 

   She says while a secure border is a good thing, it is important for Congress to consider some type of measure in any immigration reform bill that would ease the visa requirements for 'day trip shoppers' to come into Texas from the border cities in northern Mexico.

 

  "The laser visa is a very rigorous process now," she said.

 

  Mexican shoppers continues to be big business for Texas merchants, as middle class and wealthy Mexicans flock into Texas over Christmas and also Holy Week to buy the latest fashions, and to buy electronics and other items which are frequently heavily taxes or not available in Mexico.

 

  Weisberg-Stewart says the higher VAT in northern Mexico could also be a boost for Texas businesses, if the federal government could take the proper steps to allow law abiding shoppers into the country.

 

  "Facilitating the trade, especially when our country is broke and we need the economic opportunity on this side of the border," she said.  "This is a perfect opportunity to correct our mistakes, and try to get this stuff going."

 

 

 

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