Maquiladoras settling differences over Mexico's tax changes

By Stephen Downer
Correspondent

Published: January 31, 2014 1:25 pm ET
Updated: January 31, 2014 1:29 pm ET

Image By: Stephen Downer Emilio Cadena Rubio

Related to this story

Topics Public Policy, Mexico, Automotive

MEXICO CITY — Mexico's maquiladora industry has largely settled its differences with the government over fiscal issues, according to the sector's new leader Emilio Cadena Rubio.

"We have resolved some but not all" of the differences the industry had with the federal government, Cadena, president of Index, the national maquiladora council, told reporters Jan. 28.

The one outstanding bone of contention is an increase in the rate of income tax — from 17.5 percent to 30 percent — levied on Mexico's 6,000 or so maquiladoras, most of which are represented by Index, Cadena said at a news conference in Mexico City.

"But that should not be a reason why a company has to close," he said.

The Mexican Congress's approval of a tax bill, called the Reforma Hacendaria, in October not only increased the industry's income tax bill but removed tax exemptions, such as those relating to value-added tax. Some of the exemptions were subsequently reinstated by decree in December and the bill is now law.

Index, an acronym for Consejo Nacional de la Industria Maquiladora y Manufactura de Exportación AC, is an umbrella council for 20 maquiladora associations across Mexico.

According to Cadena, who was elected as Index's president for 2014 and 2015, the maquiladora industry employs 2.3 million and accounts for 80 percent of Mexico's non petroleum exports, "a fact which makes us key for the future of the country."

He told Plastics News in a separate interview that maquiladora company exports totaled almost $200 billion in 2013.

During the news conference he said that 40-50 percent of Index's members work for the automotive industry "and many of them have injection molding operations."

But he said that plastic injection molding is one of the manufacturing activities that Index must develop if it is to remain competitive and attract more sophisticated manufacturing to Mexico. "We have fallen behind," he said.

The most radical of Index's strategy for the next two years will be to develop human talent, he said. "The infrastructure, such as schools, universities, etc, is there but we don't have sufficient pupils coming in… Insufficient numbers are graduating from the technical schools."

Cadena said he considers Mexico's major manufacturing competitors to be the United States, Germany and South Korea, not Central America.


Comments

Maquiladoras settling differences over Mexico's tax changes

By Stephen Downer
Correspondent

Published: January 31, 2014 1:25 pm ET
Updated: January 31, 2014 1:29 pm ET

Post Your Comments


Back to story


More stories

Image

Minnesota receives grant to help develop new bioplastics

September 17, 2014 4:08 pm ET

The University of Minnesota has received a $20 million grant to fund the development of new types of bioplastics.    More

Image

Tiny plastics swim in Australian waters

September 17, 2014 11:16 am ET

A University of Western Australia marine scientist has found the sea's surface in Australian waters is contaminated by more than 4,000 pieces of tiny ...    More

Image

Rise of PP recycling leads to first bale specifications

September 17, 2014 10:22 am ET

PET has its bale specifications for recycling. And so does high density polyethylene. But now comes polypropylene's time.    More

Image

Cascade Engineering founder Keller to step down as CEO

September 16, 2014 8:33 pm ET

Cascade Engineering Inc. is undergoing a transition as President Mark Miller will also add the role of CEO, replacing founder Fred Keller, who has...    More

Image

Heineken swapping out plastic for wood for its pallets in Mexico

September 16, 2014 4:35 pm ET

Dutch brewer Heineken NV is to replace all its wooden pallets in Mexico with a high impact-resistant plastic pallet, co-designed and produced by Mexic...    More

Market Reports

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events