4S Ranch Allied Gardens Alpine Baja Balboa Park Bankers Hill Barrio Logan Bay Ho Bay Park Black Mountain Ranch Blossom Valley Bonita Bonsall Borrego Springs Boulevard Campo Cardiff-by-the-Sea Carlsbad Carmel Mountain Carmel Valley Chollas View Chula Vista City College City Heights Clairemont College Area Coronado CSU San Marcos Cuyamaca College Del Cerro Del Mar Descanso Downtown San Diego Eastlake East Village El Cajon Emerald Hills Encanto Encinitas Escondido Fallbrook Fletcher Hills Golden Hill Grant Hill Grantville Grossmont College Guatay Harbor Island Hillcrest Imperial Beach Imperial Valley Jacumba Jamacha-Lomita Jamul Julian Kearny Mesa Kensington La Jolla Lakeside La Mesa Lemon Grove Leucadia Liberty Station Lincoln Acres Lincoln Park Linda Vista Little Italy Logan Heights Mesa College Midway District MiraCosta College Miramar Miramar College Mira Mesa Mission Beach Mission Hills Mission Valley Mountain View Mount Hope Mount Laguna National City Nestor Normal Heights North Park Oak Park Ocean Beach Oceanside Old Town Otay Mesa Pacific Beach Pala Palomar College Palomar Mountain Paradise Hills Pauma Valley Pine Valley Point Loma Point Loma Nazarene Potrero Poway Rainbow Ramona Rancho Bernardo Rancho Penasquitos Rancho San Diego Rancho Santa Fe Rolando San Carlos San Marcos San Onofre Santa Ysabel Santee San Ysidro Scripps Ranch SDSU Serra Mesa Shelltown Shelter Island Sherman Heights Skyline Solana Beach Sorrento Valley Southcrest South Park Southwestern College Spring Valley Stockton Talmadge Temecula Tierrasanta Tijuana UCSD University City University Heights USD Valencia Park Valley Center Vista Warner Springs

Baja sales tax to jump 5% in 2014

State senate votes in favor of President Peña Nieto’s proposal

Mexico's senate votes on tax hike on October 30. (Frontera photo)
Mexico's senate votes on tax hike on October 30. (Frontera photo)

Baja Californians are bracing for what some economists and political leaders have warned will be a major financial crisis after Mexico's senate voted in the wee hours of Wednesday, October 30, to increase the state's sales tax to 16%, bringing it in line with the national sales tax charged in most of the rest of the country.

The new rate, scheduled to take effect on January 1, 2014, is an increase of 5 percentage points over the current 11% rate of what is called the IVA, or value-added tax.

For decades, some border areas like Baja California have enjoyed special status, with a lower IVA to keep them competitive with their international neighbors. But a budget proposal presented by Mexican president Enrique Peña Nieto would eliminate that favored standing and make the 16% federal sales tax standard across Mexico.

Since Peña Nieto first included the IVA increase in his September 13 budget package, a growing chorus of Baja California interests — academics, union leaders, business owners, industrialists, and politicians, among many — have issued warnings of what would likely happen should the president's plan win approval.

Opponents claim huge price increases will ensue, unemployment will soar as businesses trim staffs, inflation will rise, businesses will close or downsize, an already moribund tourist industry will be pushed over the edge into extinction, and visa-holding consumers able to cross the international border will abandon Baja California businesses to shop in the U.S.

Those without a visa, mainly the poor, will have no choice but to pay the 16% sales tax.

Opponents from the right, led by the "National Action Party" (PAN) argued in the senate that the increase would be deadly for business and industry, while opponents from the left, led by the "Party of the Democratic Revolution," argued the tax is regressive and unfairly hits hardest at Baja California's poorest residents.

But in an early morning session on October 30, the president's "Institutional Revolutionary Party" (PRI) and its allies prevailed on a 68-55 vote, giving general approval to the broad budget outline.

Amendments by the PAN that would have eliminated the IVA increase were defeated, leading Reuters to report: "The opposition conservative National Action Party (PAN) abandoned the session, with PAN Senate leader Jorge Luis Preciado arguing that his party's efforts to amend the bill were pointless because voting had been pre-arranged. A recess was ordered and the Senate later agreed to reconvene the session at midday on Wednesday."

Opponents of the increase have repeatedly said that, should they lose in the legislature, they will turn to the courts for relief, seeking what is called an amparo, similar to an injunction in U.S. law, to block the tax hike from taking effect.

Here's something you might be interested in.
Submit a free classified
or view all

Previous article

Starfish Filipino Eatery brings something new to O.B.

Simple, satisfying, and fitting for that beachy vibe
Next Article

How San Diego moms cope with Zoom

The green pod has math and the yellow pod has humanities. At 10, red and blue pods have independent work time.
Mexico's senate votes on tax hike on October 30. (Frontera photo)
Mexico's senate votes on tax hike on October 30. (Frontera photo)

Baja Californians are bracing for what some economists and political leaders have warned will be a major financial crisis after Mexico's senate voted in the wee hours of Wednesday, October 30, to increase the state's sales tax to 16%, bringing it in line with the national sales tax charged in most of the rest of the country.

The new rate, scheduled to take effect on January 1, 2014, is an increase of 5 percentage points over the current 11% rate of what is called the IVA, or value-added tax.

For decades, some border areas like Baja California have enjoyed special status, with a lower IVA to keep them competitive with their international neighbors. But a budget proposal presented by Mexican president Enrique Peña Nieto would eliminate that favored standing and make the 16% federal sales tax standard across Mexico.

Since Peña Nieto first included the IVA increase in his September 13 budget package, a growing chorus of Baja California interests — academics, union leaders, business owners, industrialists, and politicians, among many — have issued warnings of what would likely happen should the president's plan win approval.

Opponents claim huge price increases will ensue, unemployment will soar as businesses trim staffs, inflation will rise, businesses will close or downsize, an already moribund tourist industry will be pushed over the edge into extinction, and visa-holding consumers able to cross the international border will abandon Baja California businesses to shop in the U.S.

Those without a visa, mainly the poor, will have no choice but to pay the 16% sales tax.

Opponents from the right, led by the "National Action Party" (PAN) argued in the senate that the increase would be deadly for business and industry, while opponents from the left, led by the "Party of the Democratic Revolution," argued the tax is regressive and unfairly hits hardest at Baja California's poorest residents.

But in an early morning session on October 30, the president's "Institutional Revolutionary Party" (PRI) and its allies prevailed on a 68-55 vote, giving general approval to the broad budget outline.

Amendments by the PAN that would have eliminated the IVA increase were defeated, leading Reuters to report: "The opposition conservative National Action Party (PAN) abandoned the session, with PAN Senate leader Jorge Luis Preciado arguing that his party's efforts to amend the bill were pointless because voting had been pre-arranged. A recess was ordered and the Senate later agreed to reconvene the session at midday on Wednesday."

Opponents of the increase have repeatedly said that, should they lose in the legislature, they will turn to the courts for relief, seeking what is called an amparo, similar to an injunction in U.S. law, to block the tax hike from taking effect.

Sponsored
Here's something you might be interested in.
Submit a free classified
or view all
Previous article

Godzilla vs. Kong: monstrous

This isn’t a movie, it’s a product strung together off the backs of merchandise that came before it.
Next Article

Can Peeps cure scurvy?

Purchasing half-priced Easter candy from the local Rite Aid
Comments
1

Gee, Bob, just another reason for Gringos to avoid crossing the border looking for "bargains", huh?

Oct. 30, 2013

Sign in to comment

Sign in

Art Reviews — W.S. Di Piero's eye on exhibits Ask a Hipster — Advice you didn't know you needed Best Buys — San Diego shopping Big Screen — Movie commentary Blurt — Music's inside track Booze News — San Diego spirits City Lights — News and politics Classical Music — Immortal beauty Classifieds — Free and easy Cover Stories — Front-page features Excerpts — Literary and spiritual excerpts Famous Former Neighbors — Next-door celebs Feast! — Food & drink reviews Feature Stories — Local news & stories From the Archives — Spotlight on the past Golden Dreams — Talk of the town Here's the Deal — Chad Deal's watering holes Just Announced — The scoop on shows Letters — Our inbox [email protected] — Local movie buffs share favorites Movie Reviews — Our critics' picks and pans Musician Interviews — Up close with local artists Neighborhood News from Stringers — Hyperlocal news News Ticker — News & politics Obermeyer — San Diego politics illustrated Of Note — Concert picks Out & About — What's Happening Overheard in San Diego — Eavesdropping illustrated Poetry — The old and the new Pour Over — Grab a cup Reader Travel — Travel section built by travelers Reading — The hunt for intellectuals Roam-O-Rama — SoCal's best hiking/biking trails San Diego Beer — Inside San Diego suds SD on the QT — Almost factual news Drinks All Around — Bartenders' drink recipes Sheep and Goats — Places of worship Special Issues — The best of Sports — Athletics without gush Street Style — San Diego streets have style Suit Up — Fashion tips for dudes Theater Reviews — Local productions Theater antireviews — Narrow your search Tin Fork — Silver spoon alternative Under the Radar — Matt Potter's undercover work Unforgettable — Long-ago San Diego Unreal Estate — San Diego's priciest pads Waterfront — All things ocean Your Week — Daily event picks
4S Ranch Allied Gardens Alpine Baja Balboa Park Bankers Hill Barrio Logan Bay Ho Bay Park Black Mountain Ranch Blossom Valley Bonita Bonsall Borrego Springs Boulevard Campo Cardiff-by-the-Sea Carlsbad Carmel Mountain Carmel Valley Chollas View Chula Vista City College City Heights Clairemont College Area Coronado CSU San Marcos Cuyamaca College Del Cerro Del Mar Descanso Downtown San Diego Eastlake East Village El Cajon Emerald Hills Encanto Encinitas Escondido Fallbrook Fletcher Hills Golden Hill Grant Hill Grantville Grossmont College Guatay Harbor Island Hillcrest Imperial Beach Imperial Valley Jacumba Jamacha-Lomita Jamul Julian Kearny Mesa Kensington La Jolla Lakeside La Mesa Lemon Grove Leucadia Liberty Station Lincoln Acres Lincoln Park Linda Vista Little Italy Logan Heights Mesa College Midway District MiraCosta College Miramar Miramar College Mira Mesa Mission Beach Mission Hills Mission Valley Mountain View Mount Hope Mount Laguna National City Nestor Normal Heights North Park Oak Park Ocean Beach Oceanside Old Town Otay Mesa Pacific Beach Pala Palomar College Palomar Mountain Paradise Hills Pauma Valley Pine Valley Point Loma Point Loma Nazarene Potrero Poway Rainbow Ramona Rancho Bernardo Rancho Penasquitos Rancho San Diego Rancho Santa Fe Rolando San Carlos San Marcos San Onofre Santa Ysabel Santee San Ysidro Scripps Ranch SDSU Serra Mesa Shelltown Shelter Island Sherman Heights Skyline Solana Beach Sorrento Valley Southcrest South Park Southwestern College Spring Valley Stockton Talmadge Temecula Tierrasanta Tijuana UCSD University City University Heights USD Valencia Park Valley Center Vista Warner Springs
Close