Oliver Quintero

Oliver Quintero

Welcome To the Northern Free Zone

One of the campaigns promises that gained more supporters around here for our new president, Andres Manuel Lopez Obrador (or AMLO for short), was the proposal of a new “Free Zone” along the northern border that would reduce taxes, increase the minimum wage 100% and lower fuel prices to try and match those in the USA.

Since the first day of the year, this promise has become a reality, and you are now living in the new free zone for the northern border.

So, what does this mean for you? As a consumer, this means that you will now be paying 8% IVA on most products and services instead of the 16% you usually pay. For those of you unfamiliar with IVA, that’s the Mexican equivalent to the VAT in the US. Note that I said most; I will explain that later.

If you have a business, you will also have another benefit: Instead of paying the usual 30% on the ISR (income tax), you will now be able to receive credit for 10% of that. This means that you will only be paying 20% now.

Regarding gas prices, we have already seen some gas stations lowering their prices, since they have a special benefit in that they won’t be charging any VAT on gasoline and diesel; this reduced gas prices to exactly 16%. This reduction doesn’t actually match it to prices in the US, but it definitely closes the gap a little bit more.

Minimum wage was doubled to $176.72 pesos per day (about $9 USD); the older wage at $4.50 was a joke, and almost nobody was working for that.

Since the newly created Free Zone is defined by a decree and not a law, businesses must register for it and they will have to meet certain requirements; therefore, don’t shout bloody murder if you see 16% IVA in your ticket, since there is a possibility that some businesses don’t meet the requirements or just haven’t applied yet.

In order to be able to obtain the benefits businesses need to prove that at least 90% of their total sales are from the border region. They will also be asked to prove that they have a valid address in the region for at least 18 months. These two requirements are key in discouraging mainland businesses from establishing an address in the border just to obtain said benefits.

Businesses that are already established have until January 30th to file their application, and newly established businesses will have 30 days after registering their businesses with the SAT (which is the Mexican IRS).

The free zone objective is to increase competitiveness with the US, avoid migration and make it more attractive as an investment option.

If you were here back before 2014 you might remember that we already had lower taxes here in the border, but that benefit was removed by president Peña Nieto. At that time VAT in the area was 11%. This means that taxes now will be even lower than at that time.

Several analysts say that Northern Baja will benifit the most  from this new decree, as the biggest percentage of the population in the state lives near the border, and because all its municipalities are considered part of it.

For now, the decree will be valid only for 2019 and 2020. Surely, results will be analyzed after these two years and a decision will be made on whether to extend it or not.

New Campaign To Prevent Car Break-Ins In Rosarito

The Rosarito Tourism and Conventions Commitee (COTUCO) has launched a new campaign to prevent car break-ins from downtown Rosarito all the way to Popotla.

Car break-ins have been a problem for years all along the free road, with most of the victims being tourists that forget that it’s not safe to leave your valuable belongings at sight inside your car.

Edgar Orozco, head of COTUCO, said that the campaign consists of several signs that are being installed along the Benito Juarez and Popotla Boulevards, informing people to double check their cars before leaving them unattended.

The tourism police said they would pitch in by doing more patrolling around the area. Incredibly enough the chief of tourism police stated that “It’s important for business owners to remind their patrons to not leave their valuable stuff in their cars because opportunity makes the thief”.

No, Mr. Chief of Tourism Police, opportunity doesn’t make the thief. Lack of well-paying job opportunities, drugs and a deficient police department make the thief. On his defense it’s a popular Mexican saying, and he is right, don’t leave your stuff at plain sight in the car, that’s a recipe for disaster and more often than not it’s more expensive to repair the window than what they take.

Written from information from Ecos de Rosarito

Que Pasa In Baja?

Goodbye tax breaks. Ensenada can say goodbye to the proposed border tax-break that Mexico’s new president-elect, Andres Manuel Lopez Obrador, has proposed. In a meeting with Kiko Vega, our state governor, AMLO has already confirmed that cities in the border zone that will receive these benefits will only be the ones located up to 19 miles from the US border.

There is still some confusion regarding what will happen to cities that are stuck in half, like Rosarito, that has a piece of its land out of the so-called “border zone”. If the measure is strict, everything south of K 34 would not be included; that would be El Descanso, Calafia, Las Gaviotas, El Pescador, Puerto Nuevo, Cantamar and Primo Tapia.

Our Wine Valley is getting water. An agreement has been formalized between our state government and an Israeli company in order to build a water treatment plant in Tijuana and a water line to deliver the treated water all the way to the wine valley.

The $72 million USD project will bring up to 290 gallons of water per second to the valley when the project is completed in June 2020, although it would be able to start delivering about a fourth of that amount in a little less than a year.

The Israeli company, Odis Adversa, has stated that the quality of water will be superior to the one being extracted from natural sources present in the valley.

This new endeavor will allow the valley to grow sustainably while reducing the amount of contaminated water going to the ocean in Tijuana.

More corruption, really? An elaborate network of corrupt officials and import/export companies focused on car imports has been “officially” discovered by federal authorities.

For a $300 USD “fee” per car, authorities allowed the legal importation of cars into Mexico with false documentation that stated that the cars were valued at about 10% of their real cost, thus lowering the taxes imposed on these imports by thousands of dollars per vehicle.

It is said that that up to 80,000 vehicles were imported this way, and the chiefs of the Mexican customs offices in Mexicali and Juarez were involved in the scheme.

It was a productive racket for those involved, who pocketed more than $24 million USD while it lasted.

No jail time has been announced for the corrupt officials yet, and incarceration will probably not happen.

Toll road fee increase, again. For a second time this year, there was an increase on the toll road fees, 1 more peso on the Playas and Rosarito toll booths ($36 pesos), and 3 pesos more for Ensenada ($40 pesos).

This is the second increase this year, bringing the price of traveling on the road up 14% since the start of this year.

The increase was national, with most of the toll roads in the country being subject to surges of varying percentages.

Ensenada Gets A New Development

About 11 years ago, a group of real estate developers from Mexico City were attracted to our area with promises of a booming real estate market that had more qualified clients than inventory to sell.

The group had just started their project in Ensenada and had already received deposits for 5 of their condo units when the reality hit: the subprime mortgage crisis had started. Read more

Que Pasa in Baja?

This edition we discuss the beginning of the low season for tourism, the huge fire that broke out in Ensenada, how the Ensenada police is equipping to detect high-volume noise offenders, the new hotel being developed in Cuatro Cuatros, the donation of K-9 agents from the US to Mexico, new investments in alternative energy generation and what the SWAT spring-breakers tourism company is preparing for next year in Rosarito.

Read more

Que Pasa in Baja?

This week we talk about how the totoaba could be back on the market soon, the Margarita cocktail turning 69 (at least in Ensenada!), about how a crooked lawyer swindled money from a group of retired americans, how our beloved Baja’s feelings got hurt, the importance of checking your pets for ticks and lastly about the influx of tourists this year.

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Que Pasa in Baja?

Coastal property rentals on high demand. In a recent statement, Marco Antonio Preciado, head of Baja’s Real Estate Professionals Association (CEPIBC), said that the demand for rental properties in the so-called “Golden Zone” which includes Tijuana, Rosarito, and Ensenada; exceeds the offerings available. Read more

Que Pasa in Baja?

Teachers on strike. More than 2,000 state teachers have been on strike, intermittently demanding salary payments from the state government for temporary teachers and for the ones that have recently retired but have not received their pensions. Read more

Green Light on the Off-Road Museum

Good! We will need some new attractions for those tourists that get to Ensenada through the new airport.

The Ensenada business council has officially asked the State Government to build the Off Road Museum in the city’s main boulevard, right where the state tourism office is located, next to CEARTE. Read more

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