Collection reported its worst first two-month period since the 1995 post-crisisbecause the tax revenue suffered a contraction at the start of 2021 due to the lag in the reactivation of the economy.
Tax revenues amounted to 620 thousand 520 million pesos in the first two months of 2021, which implied a drop of 4.7 percent in real terms compared to the same period last year, the Ministry of Finance and Public Credit (SHCP) reported on Tuesday in its Public Finance Report and Public debt to February.
The negative variation observed in the first two months of the year is the worst drop in tax collection since 1996, the year of the economic post-crisis of 1995, according to Treasury statistics. In the first two months of 1996, tax revenues fell 16.6 percent in real terms.
in your report tax authorities indicated that, in addition, tax revenues were 14 thousand 788 million pesos below what was scheduled for the period, since they were estimated in the Federation Income Law (LIF) 2021 income from tax collection for 635 thousand 309 millions of pesos.
Raquel Buenrostro, head of the Tax Administration Service (SAT)acknowledged Tuesday during a face-to-face meeting with the Treasury and Public Credit Commission of the Chamber of Deputiesthat the collection observed at the beginning of the year is lower than estimated because the country continues to be immersed in a pandemic that brought economic effects to the whole world.
“We were expecting the reactivation to be from the first of January (because) the vaccines began to arrive in December. There is a gap in the reactivation, but the fact that revenues have fallen slightly at the beginning of the year does not mean that this is our forecast for the end of the year”He argued in the face of questions from legislators about income.
However, he assured that, if the pandemic is considered to have impacted the economy of the countries, tax revenues “they go well and as expected”, this in the face of an economic reactivation that will run alongside the progress of the vaccination plan.
Inside, ISR reported a reduction of 2.8 percent in real terms in the first two months of the year compared to the same period last year and VAT reported a slight drop of 0.8 percent in real terms, while the IEPS fell 19.8 percent in real terms.
If only the tax revenues for February are observed, the data indicates that in February they fell 3.2 percent per year, this is the lowest negative variation since February 2014.
Oil revenues give better balance to budget revenues When looking at the total budget revenue, what the Treasury data shows is that, although they showed a real reduction of 4.3 percent in the first two months of 2021, inside there was a better behavior of oil revenue derived from the injection of resources a Petróleos Mexicanos (Pemex) and the global stabilization in the conditions of the oil sector.
Budget revenues amounted to 927 thousand 682 million pesos in the first two months of 2021, which implied a real reduction of 4.3 percent compared to the same period last year. Likewise, that amount was 11 thousand 665 million below what was programmed in the LIF.
Oil revenues added 127 thousand 300 million pesos as of February 2021, which represented an increase of 26.8 percent compared to the same period last year.
In the interior, income from Pemex increased by 114.1 percent in real terms and those from the federal government decreased by 14.7 percent in real terms in the reference period, despite the fact that oil revenues from the federal government were 13 billion pesos above schedule.
“The federal government’s oil revenues exceeded the scheduled amount by 13 thousand 2.5 million pesos, including the reduction in the high tax burden of Pemex intended to free up resources for investment, reflecting the improvement and global stabilization in the conditions of the sector”, Treasury noted.
And he added that in February the federal government made a capital contribution to Pemex for 32 thousand 62 million pesos, “which allows it to continue investing in the development of new sources of long-term resources for the Mexican State and has no impact on the finances of the public sector, since its purpose is the amortization of the company’s debt.”
Health exercises 43% of its budget Net budget spending amounted to 1,031 billion pesos in the first two months, which implied an annual growth of 6.1 percent.
However, net spending reported an under-exercise of 54 thousand 636 million pesos, of which 30 thousand million pesos corresponded to programmable spending, by the government and dependencies.
The Ministry of Health, in charge of health care for the pandemic, highlighted, which reported an under-exercise of 13 billion pesos; exercised 9 thousand 890 million pesos of the 22 thousand 931 million pesos that it had programmed.
For analysts from Grupo Financiero Monex, if the divergence between income and spending is maintained, it would be inevitable to see the growth of the debt accelerate, so the guidelines presented today by the Treasury will be key to updating the perspectives.