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CONCERN OVER SURVIVAL OF FREE-ZONE MOUNTS

CONCERN OVER SURVIVAL OF FREE-ZONE MOUNTS
October 19
17:21 2018
REPORTER: News Staff, -

There is growing concern among the business community and in political circles over a recent announcement by Mexican President-Elect, Andres Manuel Lopez Obrador, that Quintana Roo and other Mexican border states would be converted into free-zone states with significantly lower Value Added Tax (VAT) rates and standardized prices on fuel. Many fear that the move will be the nail in the coffin of the Corozal Commercial Free Zone, which has already seen a number of businesses close down due to a lack of productivity in the sector.

Tens of thousands of Belizeans, if not more, frequent Chetumal, the popular Mexican city in Quintana Roo on a yearly basis for commercial and leisurely travel purposes, and the move to make the destination even more attractive is major cause for concern for many in Belize. The People’s United Party (PUP), in a statement this week, called the situation a “national crisis” and said it was shocked that the government had not responded to the news.

“The already moribund Commercial Free Zone (CFZ) at the Northern border will be greatly and negatively affected by this move,” the Party said, adding that continued pressure from the government of Belize by way of ever increasing taxes and austerity measures, makes Belize far less attractive to consumers compared to the cost of goods and services offered in Mexico. “The potential loss of jobs as a result of such actions could further hurt Belizeans, especially those in the already weakening middle class,” it added.

The Party also noted that with the Mexican VAT being cut from 16% to 8% and fuel prices to be standardized to reflect the cost of fuel in the US, more Belizeans will surely flock to Chetumal to evade GOB’s indirect taxation through swelling and unrelenting gas price hikes. This is expected to have a significant effect on Belizean businesses nationwide. The PUP has since called on the government to convene a committee of experts from the private and public sector to seek innovative ideas to address the looming issue. It also called on the Ministry of Trade to call for a meeting with Mexican counterparts to mitigate against any negative effect the move may have on the Belizean economy.

“We also want to remind this clueless government that the CFZ presently generates approximately two thousand jobs for workers from both the Corozal and Orange Walk districts. The closing of businesses in the CFZ will undoubtedly create a disruption in the labor force and further drive up the unemployment rate in these two districts. This will come on the heels of declining sugar prices and the closure of the Papaya industry that also employed hundreds of workers,” the Party said.

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