Sunday, September 24, 2023

By 2024, taxes will become more important in public finances

Tax revenue will amount to 4 trillion 941 billion pesos, an annual increase of 6.1 percent

Next year, a significant change in the state’s revenue structure is expected, as tax revenues will play a more important role in public finances The resource tie-up through oil will decrease.

According to estimates, tax revenue will be approx 4 trillion 941 billion pesos which corresponds to an annual increase of 6.1 percent.

Compared to the current year, these funds will account for a larger share of budget revenues, reaching 67.5 percent, an increase of 3.5 percentage points.

The General Criteria of the 2024 Economic Package emphasize that this change is due to the planned increase in the special production and services tax (IEPS) on fuels. This is due to the expectation of a lower oil price and a lower basis of comparison.

Although imported gasoline is expected to be cheaper, the government will not lower the price to increase IEPS revenues, according to Rolando Silva, a member of the Mexican College of Auditors’ Social Security Technical Commission.

In addition, an increase in sales is expected Income Tax (ISR) and Value Added Tax (VAT) Silva added.

The Ministry of Finance and Public Credit points out that these increases are due to the good development of economic activity, the maturation of fiscal measures and improvements in collection efficiency.

On the other hand, oil revenue is expected to fall by 11.3 percent compared to estimates for this year. This is due to a lower estimated oil price and production increases of 15.4 and 1.4 percent, respectively. As a result, the share of oil resources in total revenue will decrease from 16.2 to 14.3 percent between 2023 and 2024.

Mario Barrera, partner of Holland & Knight tax practice pointed out modification that the government will focus on stricter supervision to achieve the planned tax revenues. Furthermore, he stressed that the lack of tax reforms suggests that no effort is being made to expand the taxpayer base, meaning that the tax burden will continue to fall on formal taxpayers, businesses and workers, rather than the transition from the informal to the informal to promote informal formality.

Nation World News Desk
Nation World News Desk
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