PEMEX’s Shared Profit Right Tax Contracts to 30%

The Chamber of Deputies approved the 2024 Federal Revenue Law, introducing various adjustments including a reduction of PEMEX’s tax burden. The Ministry of Finance originally proposed a reduction of PEMEX’s Shared Profit Right (DUC) tax to 35% in the 2024 Revenue Law. However, the DUC was further reduced to 30% during the discussion. In 2022, PEMEX received a tax incentive that lowered the DUC rate to 40%, which was maintained in the 2023 Revenue Law.

This reduction in the DUC tax rate aims to help PEMEX to improve its financial health. According to experts, PEMEX's financial struggles are intertwined with its debt burden. Roxana Muñoz, Vice President and Senior Analyst, Moody's Investors Service, notes the connection between PEMEX's debt and its tax obligations. The reduction in the tax burden could enhance PEMEX's cash flow and financial stability, shared Muñoz on the Mexico Oil and Gas Summit 2023.

As a result of this reduction, about MX$25.44 million (US$1.4 million) in revenues were "unlocked" for PEMEX, reports Bloomberg Línea. Originally, the 2024 Revenue Law projected revenues of MX$744.362 million for the oil company, but this adjustment is expected to increase those revenues to MX$769.805 million for the next year. These "unlocked" revenues for PEMEX will no longer be directed to the Mexican Petroleum Fund (FMP). This change in revenue distribution did not alter the overall expected revenues for 2024.

In a pre-discussion meeting with deputies, Gabriel Yorio, Deputy Minister of Finance, highlighted that PEMEX’s debt decreased to US$96 billion. Yorio also underscored the role of the DUC to manage the NOC’s finances and mentioned that this reduction meant a fiscal treatment equal to privates.

The 2024 Revenue Law has been forwarded to the Senate for further discussion and approval.

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