Primary Article:
**Mexico Extends Tax Incentives for Northern Border Region Until 2025**
The Mexican government has announced an extension of tax incentives for the northern border region, set to remain in effect until December 31, 2025. This decision allows for the continuation of reduced tax rates, with the Value-Added Tax (VAT) set at 8% and the Income Tax (ISR) at 20%. These incentives apply across the 45 municipalities within the northern border zone, where Baja California stands out as the only state with all its municipalities included.
Initially introduced on December 31, 2018, these incentives were intended for taxpayers whose income was solely generated in the region, extending benefits for the years 2019 and 2020. They have since been continuously extended, and most recently reaffirmed in the Official Gazette by President Claudia Sheinbaum Pardo on December 24, 2024, just a week before the previous deadline.
The extension also includes fiscal stimuli for the southern border, addressing economic disparities and the impacts of migration. Moreover, a decree to maintain fuel subsidies under the Special Tax on Production and Services (IEPS) remains in place, aligning with the governmental commitment to prevent significant fuel price increases.
In support of Mexico’s nearshoring strategy, the extension also offers fiscal benefits to key export industries, such as immediate deduction for investments in new fixed assets and additional deductions for training expenses.
Secondary Article:
**Mexican Government Prioritizes Economic Growth with Continued Tax Incentives**
In addition to extending tax incentives for the northern border region, the Mexican government is focused on fostering economic growth through strategic fiscal policies. By extending these policies, the government aims to stimulate the regional economy, boost competitiveness, and encourage investment. The decision anticipates an increase in cross-border trade and supports local businesses by offering reduced tax burdens.
Furthermore, economic analysts suggest that these incentives could lead to an influx of new businesses and increase employment opportunities in both the border regions and beyond. This fiscal approach not only supports economic stability but also strengthens Mexico’s position in international markets.
As the policy remains effective, stakeholders, including regional businesses and foreign investors, are closely monitoring the economic impacts. Authorities expect this move will continue to provide economic relief and encourage sustainable development in the areas most in need, ensuring broader economic benefits across the country.