Tax Competitiveness of the Maquiladora Industry
Market selection
Table 1.6
Tax Competitiveness of the Maquiladora Industry, a Study from the International Perspective KPMG.
Progressive Weighting
0.0125
its respective indicators, the result
according to the assigned weight
and the progressive value for each
indicator. Unless noted otherwise, all
figures in column "Q" are expressed in
thousands of millions (tm) or in millions.
(m) of dollars.
Column "V" represents the result
obtained for each market in
accordance to its position in the
ranking of each indicator.
The last column of table 1.7 represents
the rating obtained by each country,
which resulted from adding up all the
values obtained. Considering that
Mexico is the base country for this
analysis, the rating of 76% obtained
would be equal to 100 points from which
the proportional rating for the other
countries is obtained.
Progressive Method Values
Indicators
Weighting
GDP
0.10
Exports (EXP)
0.15
0.0188
Exports to the USA
0.30
0.0375
Manufacturing (MFG)
0.20
0.0250
Manufacturing exports
0.15
0.0188
Exports per capita
0.10
0.0125
Source: Prepared by KPMG in Mexico 2012.
The first component of the fiscal
competitiveness analysis seeks to
select countries that are deemed
comparable to Mexico as far as
manufacturing industry and its
various types of operations are
concerned. Moreover, because of the
aforementioned scheme, Mexico is
regarded as a "nearshore" country
(offshore markets are those who are
farthest from the US market). These
countries are those where production
and manufacturing sites are installed
for having more fiscal and
operating benefits.
For this analysis we identified
countries with these characteristics for
subsequent evaluation and selection of
those most resembling Mexico.
Originally, we identified 7 countries
for assessment and compiled
representative statistics that were
obtained from economic indicators
of each country, which include gross
domestic product (hereinafter GDP),
total exports, exports to the United
States of America (hereinafter USA),
percentage manufacturing output
represents of total GDP, percentage
represented by total manufacturing
output with respect to total exports
and, last, exports per capita.
However, with a view to conducting
the evaluation of candidate countries
and their statistics, the progressive
method of assessment was used.
According to this method, a weight is
assigned to each indicator, depending
on relevance. Such weight is divided
by the total number of countries to
obtain a value which is subtracted
progressively from each country
according to their ranking position of
this specific indicator.
This position goes from higher to
lower depending on the value of
each indicator.
Hypothetically, the maximum rating
of 100% would be allocated to the
market that best met with the total of
the requirements analyzed. Therefore,
the greater percentage shall be the
market that resembles the ideal
market most and, according to the
percentage obtained by Mexico, those
immediately above and below shall be
comparable markets to
be assessed.
Table 1.6 shows the weight allocated
to each of the indicators used for
this assessment and the value
to be progressively reduced for
each indicator.
All the necessary information for the
assessment of candidate countries.
is included in the following table,
where each country appears with
Table 1.7
Progressive Method Evaluation
Weighting
GDP (tm)
EXP (tm)
EXP USA/EXP
Country
Q
V
V
Q
V
MFG (tm) 0.2
Ο
V
Q
EXP MFG (tm) (mmd)
V
EXP Per Capita (USD)
0.1
Total
Results
O
V
China
10,090
0.1000 1,581
0.1500
18%
0.2250 4,732
0.2000
490
0.1500
1,183
0.0250 0.85
85%
Brazil
2,090
0.0875
202
0.0750
10%
0.1500
560
0.1500
28
Mexico
1,567
0.0750
299
0.1125
81%
0.3000
510
0.1250
65
South Korea
1,459
0.0625
464
0.1313
10%
0.1500
573
0.1750
148
0.0563
0.0938 2,625
0.1313 9,523
992
0.0125 0.53
53%
0.0500 0.76
76%
0.1000 0.75
75%
Thailand
587
0.0500
194
0.0563
11%
0.1875
262
0.1000
50
0.0750 2,900
0.0625 0.53
53%
Malasia
414
0.0375
210
0.0938
10%
0.1125
171
0.0750
98
0.1125
7,320
0.0750
0.51
51%
Hungary
188
0.0250
93
93
0.0375
0%
0.0750
69
0.0500
24
0.0375 9,369
0.0875 0.31
31%
Costa Rica
52
0.0125
9
0.0188
36%
0.2625
11
0.0250
4
0.0188 2,048
0.0375 0.38
38%
Source: Prepared by KPMG in Mexico 2012.
сс
13View entire presentation