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Outsourcing Will be Prohibited / Praise for Fitch Ratings

By Ricardo Guzman | Thu, 11/12/2020 - 10:58

Outsourcing reform is ready. The federal government presented its reform initiative to regulate outsourcing, which will be sent immediately to the House of Representatives for review. Minister of Labor (STPS) Luisa María Alcalde pointed out that the proposal will modify six current laws, including Federal Labor, Social Security, INFONAVIT, Income Tax and Value Added Tax laws, as well as the Fiscal Code. Alcalde said outsourcing will be prohibited. “No companies can simulate labor relations and have workers hired by others,” she explained. The reform will also regulate services and specialized work, while the employment agencies will be able to interview, select and train, but not hire in substitution of another employer. When asked if it would be better to regulate this figure than to eliminate it, President López Obrador said this is the goal of the new initiative. “This is what we are going to see. Because we do not want a reform that they can circumvent again,” he noted.

Praise for Fitch Ratings. Minister of Finance (SHCP) Arturo Herrera applauded Fitch Ratings’ decision to keep Mexico’s credit rating unchanged, which he called “very good news” for both the López Obrador administration and the private sector. “This is very good news for the government and also for the business sector and it is a recognition that, despite the current circumstances, there is a solid financial framework,” he noted. Herrera highlighted that debt as a percentage of GDP will remain stable and that more access to relatively lower interest rates will be secured. On Wednesday, Fitch Ratings reiterated the rating of the sovereign of Mexico to 'BBB-' with a stable outlook. President López Obrador also praised the ratings agency decision.

Tax reduction for US border region is next. An agreement to reduce taxes for cities on the border with the US will be signed next, President López Obrador said. “In a few days, I will sign the agreement to expand support for reducing taxes in the border area. We are assessing a similar move for southern cities like Tapachula, Chiapas and Chetumal Quintana Roo, to allow them to have special treatment,” he said.

Unsolved violence in Guanajuato. President López Obrador acknowledged that his administration is struggling to pacify the state of Guanajuato. “We have already dealt with the case of Guanajuato and we are going to continue trying to pacify the state. It has cost us a lot because the operation of criminal groups was rooted and they were colluding with authorities,” he said. The president noted that despite the National Guard working in the area to protect against fuel-looting cartels, unfortunate events are still happening. “Clandestine graves are being found and the journalist that was working and killed, very unfortunate,” he said. The president also lamented the killing of Veracruz Mayor Florisel Servín earlier this week.

Birthday with family. President López Obrador recalled that tomorrow is his 67th birthday and said that he will celebrate it with a private family meal, so he asked the people not to visit the National Palace to serenade him this year. “Tomorrow, I am going to celebrate my birthday. I am turning 67 and I am fine thanks to the creator,” he said and highlighted that nature and luck are the other factors that have allowed him to celebrate another birthday in good health.

Thanks representatives. President López Obrador thanked representatives for realizing the approval of the 2021 Budget, which, he said, will secure all basic expenditure for states, investment in education, funds for the health sector and support for all his social programs. “We are doing well. We thank the legislators, in this case the Representatives, for the approval of the budget,” he said.

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Click HERE for full transcript in Spanish

Ricardo Guzman Ricardo Guzman Editor

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