Foreign trade and internal contributions in Mexico
Internal contributions comprised 72% of Mexico‘s tax revenues in 2022, with 2 trillion 732,969 million pesos, a decrease of 1.3% at a year-on-year rate and in real terms.
Above all, fiscal stimuli to maintain fuel prices impacted the result, according to information from the Ministry of Finance and Public Credit (SHCP).
In contrast, the Income Tax (ISR) showed greater dynamism due to the payment of the ISR of legal entities, which increased collection by 378,144 million pesos.
As for VAT, its drop is explained by the increase in refunds, which does not reflect the economic reality since, methodologically, both internal and foreign trade refunds decrease in internal contributions.
Contribuciones internas y de comercio exterior. Enero-diciembre.
As of December 2022, ISR from withholdings reached 1 trillion 170,349 million pesos, that is, 51.5% of total ISR collection, while 47.5% (1 trillion 079,655 million pesos) corresponded to ISR from profits of individuals and corporations.
The remainder came from ISR on other income (23,836 million pesos).
On the other hand, foreign trade contributions in 2022 presented a 0.1% real annual advance, highlighting the increase in VAT collection (13.2% real), that is, 169,791 million pesos more than what was reported in the same period of 2021.
However, IEPS collection was affected with a real decrease of 71.8%, due to the fiscal stimuli of the IEPS on fuels to maintain fuel prices in the domestic market, as well as the smuggling of these energy products.
The country recorded an estimated budget deficit of 3.7% in 2022, a rate that should fluctuate slightly in 2023 and 2024, reaching 4% and 2.6%, respectively.
Spending priorities include social programs, the creation of the National Guard to fight rising crime, and new funds to support Pemex, whose rating was downgraded by Fitch due to uncertainty surrounding its future strategy and financial stress.
The sector is of vital importance to the Mexican economy, as oil production accounts for one third of government revenues.