The Mexican government has announced a fiscal support program to restart production and preserve employment in the flooded areas of the states that were hit hardest by recent hurricanes.
The Ministry of Finance released a statement exempting taxpayers in the states of Sinaloa, Veracruz, Oaxaca, Guerrero, Tabasco, Chiapas and Yucatán from having to pay income tax and businesses from paying any flat-rate taxes for August, September, October and the whole fourth quarter of 2013. Small businesses will also be exempt from value-added tax (VAT) in their transactions for the same period.
The tax-relief measures will be effective immediately and extend through the end of the year. They will also affect mortgages and loan payments, which will get deferred for three months.
Hurricane Ingrid and tropical storm Manuel hit Mexico in early September, almost concurrently --- Ingrid came from the Gulf of Mexico, while Manuel hit the country from the Pacific Ocean, in a rare dual event. In the storm’s wake, half a million people are homeless, 50,000 people were evacuated, 123 people died, and 68 remain missing as a result of a landslide, according to the Interior Ministry. One half of the victims were killed in Guerrero, one of the poorest states in Mexico.
In addition, thousands of hectares of crops have been flooded and dozens of roads destroyed. All told, more than 1 million people were affected in one way or another by the storms, which dumped more rain than the country has witnessed in almost six decades, President Enrique Peña Nieto said.
The Government has already set aside 39 billion pesos (around $3 billion) for relief action. But the whole scale of the damage has yet to be determined.
Meanwhile, some Mexicans are complaining that political corruption and incompetence likely made the damages for the storms even worse than they should have.
“If we had the right development plan, the country wouldn’t fall into chaos,” Angel Macías Garza, the vice president for infrastructure at the Mexican Construction Industry Chamber, told the New York Times, adding that corrupt state officials hand out permits to developers to construct properties along riverbeds and in canyons.
“Politically, prevention doesn’t pay. There is a lack of vision and a lack of resources,” Macias added.
Patricia covers Latin America for the International Business Times.
Before joining IBT in March 2013, she worked at BBC America in New York, La República in Lima...