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Tax Reforms Hit Bachoco's Bottom Line

by 5m Editor
30 December 2009, at 6:26am

MEXICO - A tax increase will cost Bachoco 200 million pesos this year.

Industrias Bachoco S.A.B. de C.V. (Bachoco), Mexico's leading producer and processor of poultry products, has announced that Bachoco's income tax rate will increase two percentage points for the year 2010, according to Business Journals, citing a company press release.

The announcement follows the recommendation of the Mexican Stock Exchange. The Company is disclosing the main effect resulting from the reform of the Mexican tax laws, according to information published in the Official Gazette on 7 December 2009.

As a consequence of such increase, during this fourth quarter, the Company will record a one-time charge of about 200 million pesos (MXP) for deferred taxes. This charge will not affect the Company's cash flow. Bachoco does not expect any other material effects on its financial condition resulting from other items in the reforms.