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Daily Tax Report: International

Mexico Small, Medium Cos. Need More Support, Tax Deferrals: CCE

April 6, 2020, 7:01 PM

Business community expected to hear clear measures to confront effects of coronavirus on small and medium companies, said head of business chamber CCE Carlos Salazar.

  • Measures announced weren’t enough, groups don’t agree with solutions that are being implemented
  • Private sector across the country is meeting tomorrow, will hold another meeting with unions later in the week
  • Business groups have called for official discourse to stay away from “conservative” and “neoliberal” labels and instead focus on bringing country together
  • Without more measures, GDP could fall 7% and up to 1.2m jobs could be lost
  • Response to plan is evident in hit to currency
  • “Our proposals to the government were met with a closed door,” he said
  • Profits of all businesses, big and small, will be impacted by crisis
  • Private sector invests 9 out of 10 pesos that are invested in the country, public sector invests 1
  • The only solution presented yesterday was more support for already existing social programs
  • There’s an entire universe of businesses that don’t qualify for social programs and millions of workers that are wondering how to survive
  • Many affiliates of tourism and services chamber Canaco-Servytur have alerted they wouldn’t be able to sustain businesses without any income for more than 30 days, says head of group Jose Manuel Lopez Campos
    • Many businesses won’t be able to reopen once health crisis is over if there’s no support from government
    • Businesses need capital, access to financing, deferral of fiscal obligations and help with some payments like water, electricity
  • Mexico City commerce group Canaco says it’s “dissapointed” on not hearing any measures on Sunday that will help people come out of the economic crisis as soon as possible, head Nathan Poplawsky said
    • Mexico City is losing 2b pesos on a daily basis due to coronavirus measures that have shut restaurants, markets
    • Businesses also need help with payroll and access to credits on the local levels
    • All formal jobs that are lost during crisis will become part of demographic that requires aid from social programs, which won’t be able to absorb all of them
    • Consumption in Mexico City fell by 80%
  • Business groups weren’t asking for handouts, says head of industrial chamber Canacintra, Enoch Castellanos, but help in deferring taxes and some payments
    • “I hope with time, we’ll see some form of support,” he said
  • Mexico has registered 37 robberies and 16 looting since virus containment measures began, said head of retail association Antad Vicente Yanez
  • Food supply in Mexico is guaranteed, country has enough inventory to weather the crisis, agriculture chamber head Bosco de la Vega said
    • Only risk to supply would be security threats along the chain, for which group has had talks with authorities
  • NOTE: AMLO Crisis Response Dismays Investors, Raises Junk Rating Risks
  • NOTE: Mexico’s Low-Key Stimulus Plan Criticized by Business Groups

To contact the reporter on this story:
Andrea Navarro in Mexico City at anavarro30@bloomberg.net

To contact the editors responsible for this story:
Brendan Case at bcase4@bloomberg.net

Dale Quinn

© 2020 Bloomberg L.P. All rights reserved. Used with permission.

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