The Effect of the Fiscal Reform on the Automotive Industry

Mario Hernández, the Leading Partner of the IMMEX Segment at KPMG followed the first panel with a presentation on the Effect of the Fiscal Reform on the Automotive Industry. Hernández stated that speaking of fiscal issues is never pleasant; however it is always necessary to analyze them when it comes to investments. The 2014 fiscal reform was due to the government’s need to increase tax collection and the pressure that international organizations, such as the OECD, put on Mexico to eliminate non-justified benefits.

The effects of the reform established income tax at 30% and new dividend duties that could directly affect local competitiveness. “Obviously, these limitations represented an increase to operating costs in Mexico as well as a threat to new investments,” Hernández explained.

The KPMG partner mentioned that the TPP agreement will be useful for Mexico to sell to new markets, though new players might risk local industry development. The changes to Mexico’s regulatory framework have made it more competitive among the OECD countries, a very positive note to end the presentation on.