Mexico Cuts Taxes

President Felipe Calderón announced a 60-billion-peso ($5.6 billion) package of tax breaks, utility-rates discounts and spending programs Monday to help Mexico's economy weather the slowdown in the U.S. economy.

Companies will get a 3 percent income tax break for the next five months and 10- to 20-percent electricity rate reductions, as well as credit from development banks and an increase in infrastructure spending to help them overcome the effects of what Calderón called “an adverse international environment.”

“Since last year, the economic performance of our principal trading partner (the United States) has show signs of deceleration,” Calderón said at a ceremony to announce the package. “The problems in its financial sector and housing market make its prospects for growth in 2008 not very encouraging.”

Importance: Mexico is basing itself off the U.S. which probably is not a good call, but no one can argue tax cuts. The Mexican citizens do need this.

Grade this post.

New Mexican Airport

MEXICO CITY, Feb 21 (Reuters) - Mexican airport operator Asur will fight to take part in the bidding process for a planned airport in the Riviera Maya region which will drain passenger traffic away from its key runways at the resort of Cancun.

Chief Financial Officer Adolfo Castro said on Thursday Asur will take the case to court if government authorities do not allow the company to bid for the rights to build and run the airport in Quintana Roo state.

The government has not yet decided if Asur can participate in the bidding process. The sticking point is competition because Asur already operates nine airports in Mexico's southeast, including Cancun.

"If they do not allow us to participate we will use all the legal tools that we have in hand in order to protect our rights and in order to be part of the bidding process," Castro told a conference call with analysts.

Full Story

Importance: Yet another case of stifling "monopolies" in the name of competition in the Mexican government-business relationship. With the world economy in a decline, I find it odd that the Mexican government is increasing its business taxes. On an economic side note, the Mexican stock market gained on Thursday and the peso strengthened (another Reuters story...)

GRADE THIS POST!!!!!