During 2022, Mexico’s tax revenues fell 1.0% in real terms (and -4.9% in nominal terms) to 3.80 trillion pesos, while social spending rose to its all-time high during the same year, reported the Ministry of Finance and Public Credit (SHCP).
The public Treasury stopped collecting 197 billion pesos (mdp) of what was estimated in the 12 months of the previous year, partly due to the subsidies that the federal government applied to the IEPS in gasoline prices throughout 2022.
The collection of the special tax on products and services (IEPS) in 2022 had a negative result of -72% during 2022, entering only about 117,532 million pesos (mdp), in the year, about 387,706 million pesos less than what was programmedreported the SHCP in its report on the economic situation, public finances and public debt corresponding to the fourth quarter of last year.
On January 17, the Tax Administration Service (SAT) reported that in 2022 they spent 373 billion pesos (mdp) to subsidize the prices of gasoline and diesel.
In other tax revenues, those corresponding to income tax (ISR) increased 11% in terms with respect to 2021 up to 2.26 trillion (million million) pesos, while the value added tax (VAT) had revenues of 1.22 trillion pesos, 0.8% more.
The total revenue of the public sector was 6.59 trillion pesos during the year 2022, some 422,462 million pesos more, or 2.5% in percentage terms.
More expenses rise than income
Secondly, Total public sector spending was 7.56 trillion pesos, 4.1% more than what was programmed in 2022; that is to say, more was spent than what was entered last year.
The total expense without counting disbursements in financial investments, payment of pensions, participations and financial cost rose in the year 6.5% compared to 2021.
The SHCP also reported that spending on social protection increased by 8.7% in real terms and stood at 5.3% of the total Gross Domestic Product (GDP) of the country, which means a new all-time high in that area. The dependency did not indicate in its report the total amount of social spending focused on the vulnerable population.
On the other hand, productive investment in infrastructure grew 25% in 2022. However, andThis reached only 3.3% of the national GDPhis best level since 2016.
Participations to states and municipalities reached the largest amount since records have been recorded with a real annual growth of 7.3%, up to 1.06 trillion pesos.
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Francisco Mucino Journalist. Public finance, energy, business, innovation and the stories they contain.