Effects of VAT reduction and increase in minimum salary in the northern border of Mexico (Baja California)

Abstract

The objective of this article is to examine some of the immediate effects observed in the companies of Baja California before the 50 percent decrease in the value added tax (VAT) and the increase to the minimum wage of 100 percent. A survey was conducted with businessmen from various sectors to get their opinion on tax and income changes, while reviewing the data presented in the National Employment Occupation Survey for workers who received a minimum wage in the last half of the year 2018 and the first half of the year 2019 by size of establishment.