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Border Business Leaders Challenge Mexican Sales Tax Hike

Tijuana’s business community is mounting a legal challenge to Mexico’s planned tax hike for its northern and southern border regions.

Mexico's national congress approved the increased sales tax — from 11 percent to 16 percent — at the end of October as part of sweeping fiscal reforms pushed by President Enrique Peña Nieto.

The increase, which is scheduled to take effect on Jan. 1, 2014, will bring the border region in line with the rest of the country. But businesses in Mexican cities like Tijuana and Nogales argue that the tax hike will drive consumers across the border for cheaper American goods.

Economists have also warned that low-income border residents will see their spending power decline, especially since they may not have the ability to shop in the U.S.

Border business leaders are challenging the tax hike based on a law passed earlier this year in Mexico that strengthens protections against violations of individual constitutional rights.

They plan to gather signatures from individuals and businesses — in both the northern and southern border region — asserting the tax hike will unfairly harm their livelihood. They’ve also launched a website to coordinate signature gathering.

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