Tax Competitiveness of the Maquiladora Industry
4ndex
Foreword
Tax Competitiveness of the Maquiladora Industry, a Study from the International Perspective KPMG.
KPMG
The very complex outlook of world economy is a challenge that the governments
must face by promoting economic activity and the best strategy is seeking
national and foreign investment. However, foreign investment is limited and the
countries looking to receive it are not; therefore, the governments must offer
attractive incentives and grants to global players to be able to attract
these investments.
The maquiladora regime has been, historically, a very successful program to
attract foreign investment. Nevertheless, this regime has never been evaluated
from a tax efficiency standpoint, which is crucial to compare its effectiveness
against those other programs offered by other countries.
Knowing the level of tax competitiveness of the maquiladora regime, will allow
both, companies and government, to seek tools and schemes to improve it
and contribute to Mexico's competitiveness in other areas such as overall
costs, logistics, etc.
The International Tax Competitiveness of the Maquiladora Industry, a Study from
the International Perspective is a very valuable analysis that will show the real
standing of the maquiladora regime within the global context. This analysis is
not intended to highlight the weakness of the most powerful program to attract
foreign investment; on the contrary, the main goal is to point out those issues that
must be improved and, therefore, strengthen the maquiladora regime.
The legal certainty and the administrative burden are two main topics in which
companies and government must work together to enhance the tax efficiency
of the maquiladora regime.
We are sure that you will find this document revealing and helpful in your
decision making process. Mexico is an excellent destination for foreign
investment, a widely open country, strategically located, with excellent ratio
of labor costs and productivity, and now concerned to analyze and offer the best
and most tax efficient programs for those companies that are looking a place to
locate or relocate their operations.
KPMG in Mexico
INDEX
The complex situation currently being experienced by the global economy,
demands that both countries and organizations be highly competitive in just about
every aspect of the business. Cutting of manufacturing costs, modernization
of production infrastructure and logistics, ongoing training of labor, regulatory
and administrative simplification initiatives, trade liberalization as well as legal
certainty and optimization of tax burdens are key factors that contribute to the
development of a market for attracting and retaining investments.
Mexico has played a leading role in globalization and the maquiladora regime has
been the cornerstone in opening up trade; therefore, it is imperative to know
the tax competitiveness of the maquiladora and export manufacturing industry,
since such regime - particularly that of maquiladoras - continually supports the
modernization of our country's industrial platform and has made it a destination
with favorable conditions for receiving foreign investment.
Notwithstanding Mexico's comparative and competitive advantages and
irrespective of its vicinity with the world's largest consumer market, international
competition is tough and, thus, our country should continue looking for new tools
that enhance competitiveness and make it a natural destination for consolidation
of global manufacturing processes.
This is the main reason why the Consejo Nacional de la Industria Maquiladora y
Manufacturera de Exportación (INDEX), in collaboration with KPMG in Mexico,
has decided to conduct the International Tax Competitiveness of the Maquiladora
Industry, a Study from the International Perspective we present today.
At this Council, we are confident the study will be an essential tool for assessing
and analyzing the regime at a time of definition and design of public policies
that will chart the future not only of our organization and trade group but of the
Mexican industry as a whole.
Luis Aguirre Lang
Chairman of INDEX
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