Economy & Business - April 2021

MEXICO: Agreement over changes to outsourcing will mitigate their impact

Mexico’s President Andrés Manuel López Obrador on 5 April announced that his government had reached an agreement with business organisations and labour unions regarding outsourcing regulations, which were first proposed in November 2020. The original legislative initiative --which was proposed by the government but strongly rejected by business groups that included the Confederación Patronal de la República Mexicana (Coparmex), el Consejo Coordinador Empresarial (CCE), the confederation of industrial chambers (Concamin), and the national confederation of trade chambers (Concanaco), among others-- sought to ban the practice outright. The government argued that outsourcing, which allows businesses to reduce costs by subcontracting workers, is exploitative. According to Mexico’s national statistics institute (Inegi), there are 4.6m subcontracted workers. The government also claims that it allows tax evasion. Figures from the tax prosecuting office (PFF) indicate that tax evasion by illegal outsourcing firms amounts to M$21bn per year.

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