Mexican government moving quickly to refund value-added tax

By Stephen Downer
Correspondent

Published: May 27, 2014 12:13 pm ET
Updated: May 27, 2014 12:21 pm ET

Image By: Stephen Downer Emilio Cadena Rubio

Related to this story

Topics Public Policy, Mexico

MEXICO CITY — Mexico’s maquiladora industry received a boost this week when the federal government announced it will refund the value-added tax (VAT) levied on temporarily imported machinery and materials used by the sector in its assembly operations within two months.

The sector had feared it could take many months, or even years, for the government to refund the 17 percent tax, introduced in January. But Finance Minister Luis Videgaray said May 21 that President Enrique Peña Nieto had instructed him to pay the refunds over 20 days, starting July 1.

According to government statistics, the 5,000 or so companies that operate within the maquiladora program imported supplies and machinery valued at $156.3 billion free of VAT in 2012 alone.

Index, the National Council of the Maquiladora & Export Manufacturing Industry that represents 20 maquiladora associations across Mexico, calculated that the sector would pay $25 billion in VAT a year.

And because of the expected long delay in getting the money back, many within the industry feared for the very existence of a number of companies.

Responding to the finance minister’s announcement, Index President Emilio Cadena Rubio said: “It’s time to build so that the export manufacturing sector [the maquiladora industry] is seen as a mirror in which Mexico is reflected as a first-world country.”

Earlier this year Cadena said that 40-50 percent of Index’s members work for the automotive industry “and many of them have injection molding operations.”

In excess of 2 million workers are employed by the maquiladoras.


Comments

Mexican government moving quickly to refund value-added tax

By Stephen Downer
Correspondent

Published: May 27, 2014 12:13 pm ET
Updated: May 27, 2014 12:21 pm ET

Post Your Comments


Back to story


More stories

Image

Canada's Papp Plastics is eyeing big opportunities with JV in Mexico

November 24, 2014 4:11 pm ET

Canadian injection molder and turnkey solution provider Papp Plastics & Distributing Ltd. will open an $11 million to $12 million joint venture...    More

Image

Indian plastics group targets waste

November 24, 2014 12:46 pm ET

An Indian plastics environmental group and the country's largest brand for packaged water, Bisleri International Pvt. Ltd., have launched a trial...    More

Image

Wilbur Ross steps down from IAC board

November 24, 2014 11:38 am ET

Financier Wilbur Ross Jr. has resigned from the boards of International Automotive Components Group SA and its subsidiaries due to new regulatory...    More

Image

EU sets consumption goal of 40 plastic bags per person by 2025

November 24, 2014 9:27 am ET

Representatives of European Union member states hammered out a deal Nov. 21 to reduce consumption of lightweight plastic bags to 40 bags per person...    More

Image

Residents ask court to close pipe maker

November 21, 2014 3:22 pm ET

Residents living by National Pipe & Plastics Inc.'s new factory in an industrial zone of Endicott, N.Y., say the facility has “devastated the ne...    More

Market Reports

Plastics in Brazil - State of the Industry Report

This in-depth report examines the Brazilian plastics industry from a historical and geographical context. Our analysts provide insight on economic trends and forecasts, growing manufacturing sectors that utilize plastics, private investment opportunities, market environment challenges, and innovations in R&D.

Data tables and charts on producer prices, trade, plastics production and end market indicators is also included.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Injection Molders Market Report & Ranking 2014

This special package contains our 132-page 2014 Market Report on the Injection Molding segment and our exclusive 2014 RANKINGS database of 500+ Injection Molders for a discounted package price.

Learn more

Upcoming Plastics News Events

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

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

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

October 27, 2015 - October 29, 2015Plastics Financial Summit - New York - 2015

More Events