Public Sector Revenue Exceeds Expectations in AugustBy Emilio Aristegui | Mon, 10/04/2021 - 17:09
August was Mexico’s highest tax-collection month of 2021, reported the Ministry of Finance and Public Credit (SHCP). However, spending on social programs also reached its highest point of the entire year as the federal government continues to invest on the wellbeing of the population while reducing public spending.
“Public sector revenues for the month of August were higher than planned by MX$164.9 billion (US$8.08 billion) and increased by 5.5 percent in real terms compared to the January-August 2020 period, in congruence with the prudent estimates presented in the Economic Package,” reads SHCP’s report.
Rogelio Ramírez de la O, Head of SHCP, had previously highlighted the administration’s progress when it comes to tax collection, as reported by MBN. “Mexico strengthened tax collection through administrative simplification strategies, as well as combating tax evasion, fraud and avoidance.” Following the 2022 economic package guidelines for spending is essential for the federal government, as Mexico seeks to maintain its debt as stable as possible throughout the economic crisis. Also, as reported by MB, the main goals of the country’s future financial ventures rely on stability. “The fiscal package is designed to keep the public debt stabilized and to maintain fiscal prudence.”
SHCP highlighted that during August tax revenues without IEPS from fuels stood out, “which spun four consecutive months of growth and in January-August exceeded the program by MX$88.3 billion (US$4.32 billion), showing a real annual growth of 4.7 percent. This is in line with the sustained recovery of the economy and the constant efforts to improve collection.” Tax collection has been a major point of focus for the federal government, as Mexico continues to improve in collecting taxes efficiently with a more organized system.
However, public spending also went up, according to SHCP: “The total net expense was located at MX$4.2 trillion (US$205.7 billion), 4.5 percent higher in real annual terms with respect to the January-August 2020 period, which directly affects recovery.” With the spending on social development reaching MX$1.9 trillion (US$92.4 billion), which represents 61 percent of the entire program, the federal government continues to pursue its goal of improving the wellbeing of the population.
The management of the debt portfolio allowed authorities to reduce spending by MX$30.6 billion (US$1.5 billion), said SCHP. The financial cost decreased 9.2 percent in real terms compared to 1H21. The main objective of the federal government continues to focus on cutting public spending in order to stabilize the country’s debt.