REYNOSA, Tamaulipas – Mexico President Andrés Manuel López Obrador and Tamaulipas Governor Francisco García Cabeza de Vaca have started the Free Zone of the Northern Border program.

Among other measures it includes a doubling of the minimum wage in along the border region, a decrease in the rate of value added tax so that it is eight percent along the border, a reduction of income tax (ISR) to 20 percent along the border, and lowering gas prices so they mirror the southern regions of the United States.

García Cabeza de Vaca assured López Obrador that the Government of the State of Tamaulipas will maintain a firm and closely coordinated relationship with the Government of the Republic.

“My administration, Mr. President, has the political will, the conviction and decision to change firm guidelines to maintain a close relationship of coordination and institutional collaboration with the Government of Mexico,” the Governor said.

Noting the reduction to eight percent for value added tax and the 20 percent income tax (ISR) rate for the border region, García Cabeza de Vaca said it was important to clarify the doubts and concerns of the productive sectors in relation to the new fiscal measures and scrutinize the scope of the fiscal incentives decree for the northern border region.

“We need to know if the reduction to eight percent is a direct reduction to the consumer, as had been said, or if it is a tax credit or compensation,” asked García Cabeza de Vaca.

He said that another of the concerns is the reference to the validity of two years for the new fiscal measures, since world class companies and many major national companies make their investment projections over at least a five year period.

“It will be very important for us to understand the operating rules of the new fiscal measures and to know if the tax reductions are general or apply only for a few,” García Cabeza de Vaca said. “If we clear up the doubts, we will favor the joint work in the actions aimed at continuing to promote the development of our state.”

García Cabeza de Vaca assured that the Government of the State of Tamaulipas will remain a government allied to the Government of Mexico, consistent with the pride of being Mexican, outspoken in its treatment and committed defender of the interests of Tamaulipas.

Editor’s Note: The above Notimex story first appeared in Spanish. It was translated into English by Rio Grande Guardian reporter Blanca Gomez.