Accessibility links

Breaking News

Mexico Lures Undeclared Cash with Tax Plan, Eyes $10B Intake

FILE - A picture illustration shows Mexican pesos and U.S. dollars banknotes in Mexico City.

Mexico said on Tuesday it will offer holders of undeclared capital abroad tax incentives to bring it home in a bid to lure some $10 billion in investment and steel itself against potential shocks from the incoming Trump administration.

Confirming a Reuters report, the government said it will offer an 8 percent repatriation tax on those funds returning to Mexico in six months, provided they go into investments including fixed assets and property for at least two years.

The 8 percent tax, which is well below Mexico's top income tax rate of 35 percent, must be paid 15 days after money is transferred, President Enrique Pena Nieto's office said in a statement ahead of an expected announcement later on Tuesday.

The government said the powerful CCE business lobby estimated the plan could yield $10 billion in investment.

Latin America's second-largest economy is facing pressure from U.S. President-elect Donald Trump, who is looking to cut taxes and has threatened a hefty border levy on companies that ship Mexican-made goods to the U.S. marketplace.

Mexico's move, which was floated last week, is in line with similar moves by both Chile and Argentina.