January 31, 2018


Mexico's economic reforms take hold: Many of Mexico's small businesses don't pay taxes - or worker benefits, but more workers are stepping into formal jobs with steady paychecks indicating growth in the economy overall (Samantha Bronkar, JANUARY 31, 2018, CS Monitor)

[F]ive years after key fiscal and labor policy reforms were put into place, the nation's formal sector - including manufacturing and services - is beginning to grow. In the first half of 2017, a record number of workers joined Mexico's formal economy and were registered with the Mexican Social Security Institute, according to the institute's numbers. The uptick of 517,000 workers marks a 17 percent increase from last year, the biggest jump in two decades.

But these jobs aren't appearing out of nowhere. Many of them are transitioning out of the informal economy as employers offer work contracts with employee benefits, experts say. With formal jobs on the rise, the informal sector has dropped to 57.3 percent of Mexico's workforce, from its peak of 60 percent in 2009, reports Bloomberg.

These numbers show that "there actually is a transition occurring where a greater share of work is being done ... in the formal sector," says Christopher Wilson, deputy director of the Mexico Institute at the Wilson Center in Washington, D.C. This recent growth is part of a larger trend. "Since 2014, there have been over 2 million jobs created in the formal sector in Mexico," Mr. Wilson says.

Millions more companies are now paying tax in India (Rishi Iyengar, January 29, 2018, CNN Money)

An estimated 3.4 million businesses have registered to pay India's national goods and services tax since it was rolled out in July 2017, the government said in its annual economic survey released Monday.

That's in addition to the country's existing 6.4 million business taxpayers, the survey said. [...]

The tax overhaul -- one of Indian Prime Minister Narendra Modi's key policy moves last year -- has been touted as a game changer for the Indian economy.

It replaced a complex web of tariffs -- which often differed from state to state -- with one set of nationwide tax brackets for products, effectively turning the country into a single market for the first time.

But the introduction of the new tax system was plagued by setbacks, with confusion over online filing and the various rates leaving some businesses, particularly smaller ones, struggling to adapt.

The teething pains, coupled with Modi's shock ban on 86% of the country's cash in November 2016, were blamed for dragging India's economic growth down from 7.1% to 5.7% in the first half of 2017. Growth has since ticked up slightly to 6.3% in the quarter ended September.

The government said Monday that it expects growth to recover to above 7% in 2017-2018 as the economy shrugs off the negative impact of the policy disruption. It listed the main goals for next year as privatizing national carrier Air India, completing a $32 billion bank bailout and stabilizing the new tax system.

The damnable thing about neo-liberalism is that it works.

Posted by at January 31, 2018 4:57 PM