Mexican President Andres Manuel Lopez Obrador on Monday decreed tax cuts for northern states that he said would help power economic growth and deter migration to the US.
An executive order in the government’s official gazette granted lower rates for value-added and income taxes in more than 40 municipalities bordering the US.
Lopez Obrador’s tax cuts could reduce government tax income this year, when he is to implement a budget that seeks to use spending cuts to help fund new social welfare and infrastructure projects.
At an event in Monterrey in the northern state of Nuevo Leon on Saturday, Lopez Obrador said that the minimum wage in the northern strip of municipalities from yesterday would rise to 177 pesos (US$9), nearly double the national level, and that fuel prices would be set on a par with US prices.
“This is a very important project to boost investment and job creation,” Lopez Obrador told business leaders.
The decree seeks to give an edge to northern Mexican businesses, which compete with US-based companies across the border.
Lopez Obrador has vowed to increase economic development to deter migration to the US. US President Donald Trump wants to make Mexico take in Central Americans who are seeking asylum in the US.
The plan would give businesses in the region a tax credit worth half of value-added tax dues.
Companies that can show they earn more than 90 percent of their revenue in the area are eligible for an income tax credit worth one-third of dues.
Last month, Citigroup Inc economists estimated that lower tax revenue from the north could cost the government about 120 billion pesos a year.
A national chamber of business owners, Coparmex, welcomed the decree in a statement as a “judicious” measure that could spur investment in the region.
The center-right National Action Party (PAN), the biggest opposition to Lopez Obrador’s leftist coalition in the Mexican Congress of the Union, said that the decree was a “scam,” since it fell short of his campaign promise to cut tax rates for consumers.
PAN leader Marko Cortes said in a statement the value-added tax cuts would only benefit “intermediaries,” and that it would fail to boost investment since it was a presidential decree that could be removed at any moment.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to