MEXICO CITY, (Reuters) – Mexico pitched a number of tax incentives on Monday to entice companies into investing in a corridor of business that the President Andres Manual Lopez Obrador hopes to develop in a southern Isthmus as a way of competing with Panama Canal.
Finance Ministry said that companies investing in the Inter-Oceanic Corridor, which connects the Pacific port of Salina Cruz (Oaxaca) with the Gulf Coast hub of Coatzacoalcos (Veracruz), will not be required to pay income taxes during the first three years they are in operation.
The ministry announced that companies would only pay half the usual income tax for the next three years. They could also get a 90% discount if they meet certain employment goals.
These measures include an accelerated depreciation for investments in the first six months of operation.
The ministry announced that businesses conducting business in the corridor would be exempted from value added tax (VAT) and can claim VAT back from purchases outside the zone.
The government is planning to build 10 industrial park along the corridor as part of Lopez-Obrador's efforts to create jobs and boost the economy in Mexico's poorer southern region.
Lopez Obrador announced last week that a tender to build industrial parks across the Isthmus of Tehuantepec will be launched by mid-June.