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IPFS News Link • Mexico

Mexican sales tax hike seen as boon on US border

• http://hosted.ap.org, By ELLIOT SPAGAT
The increase to 16 percent from 11 percent, which takes effect Wednesday, has sparked large protests on the Mexican side of the border. Facebook pages with secessionist tones have generated about 200,000 "likes." Thousands have signed petitions to challenge the tax hike in court.

The Mexican government says the two-tiered tax structure, which was introduced decades ago to make border cities competitive, is no longer justified. Others say the increase may backfire by driving more shoppers north of the border, harming the economy and raising less tax revenue than anticipated.

"We don't compete against the rest of Mexico, we compete against the American economy," said Juan Manuel Hernandez, president of the Tijuana Business Coordinating Council, an umbrella group of business chambers.


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