July 14, 2017 / 8:04 PM / 6 months ago

Mexico extends offer to bring home undeclared capital from abroad

MEXICO CITY (Reuters) - Mexico will extend a tax repatriation plan aimed at bolstering the country’s paltry fiscal revenues after it pulled in nearly 76 billion pesos ($4.3 billion) in the first half of the year, President Enrique Pena Nieto said on Friday.

The plan, which offers holders of undeclared capital abroad tax incentives to bring it home, was originally set to expire in July, but Pena Nieto said he was extending it through October due to its success.

“The favorable response to this initiative is additional indication of confidence in our country,” he said in a speech.

In January, the government said the powerful CCE business lobby estimated the plan could yield $10 billion in investment.

The program was launched amid fears that U.S. President Donald Trump would scrap the North American Free Trade Agreement and apply new taxes to Mexican imports into the United States.

Under the scheme, an 8 percent tax, well below Mexico’s top income tax rate of 35 percent, must be paid 15 days after money is transferred. Repatriated funds must be channeled into investments like fixed assets and property for at least two years.

($1 = 17.56 Mexican pesos)

Reporting by Noel Randewich; Editing by David Gregorio

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