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Mexican Senate approves plan to increase sales tax in border cities like Juarez

Mexican Senate approves plan to increase sales tax in border cities like Juarez

POSTED: Wednesday, October 30, 2013 - 9:38pm

UPDATED: Wednesday, October 30, 2013 - 9:39pm

El Paso's economy might soon get a boost thanks to a decision made by the Mexican government.

Despite protests in Juarez, on Wednesday, Mexico's Senate approved a plan to increase the sales tax in border cities like Ciudad Juarez from 11% to 16%.

"We are disencouraged, like, very disappointed, from our politicians, because they have said that they were going to fight for the border, that they were going to fight for Juarez, and they didn't," said Jose Luis Mauricio, CEO of "Ser Empresario."

The hike had locals on both sides of the border on edge.

"It will definitely be a catastrophe here on the borders," said a woman in Juarez.

"It's going to be more expensive over there by the taxes so I don't think it'll be a good idea," said Ivan Estrada.

"It's going to be difficult for the companies to keep people working, you know?" said Esteban Esquivel.

Experts say retailers in Juarez will see a loss in revenue but that it isn't anything to be worried about.

"It's not something that is a welcomed prospect for retailers and for policy makers in Ciudad Juarez. Nevertheless, it's not something that is going to be disastrous," said Dr. Tom Fullerton, Ph.D., professor of economics at UTEP.

Businesses, like "Viva Perfumeria" on El Paso street, though, may profit from the hike. 

"Being so close to the border, I'd say between 80% to 90% of our customers do come from Mexico so that is a big plus for us," said Ernesto Armendariz, manager at Viva Perfumeria.

"If it's too expensive for me to shop here, then I will obviously spend my money in El Paso," said a man from Juarez.   

Businessmen like Jose Luis Mauricio said one side's loss isn't necessarily another's gain because El Paso and Juarez economies are so interconnected and actually support each other.

"We're not a city, we're a region," he said.

As part of the new tax plan, the Mexican Senate also approved higher taxes for the wealthy, and for products like soda and other junk food.

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