Tax revenue will go from 13.8 to 14.7% of GDP this year

For this 2023 the federal government, through the Tax Administration Service (SAT) expects to collect more than 4.6 trillion pesos, an annual growth of 9.9% in real terms, that is, 14.7% of the Gross Domestic Product (GDP).

The equivalent as a percentage of GDP for 2023 is higher than the 13.8% estimated for 2022 in the General Economic Policy Criteria. The outlook for last year was revised downward, initially expected to represent 14% of GDP.

If the 2023 estimate is met, as a percentage of GDP it would be the largest since records have been recorded, according to data from the Ministry of Finance and Public Credit (SHCP).

“The estimates are realistic, however, what we have been announcing a few months ago is that (for this year) a fairly complex scenario of uncertainty is presented because we have the inflationary problem, an environment of high interest rates and we are still in a process of economic reactivation”, Juan Pablo López, income researcher at the Center for Economic and Budgetary Research (CIEP), told El Economista.

In this regard, he mentioned that all macroeconomic variables can affect tax collection, therefore monitoring the evolution of tax revenue will be very important.

“It will be highly relevant to monitor the collection and the evolution of the macro variables to check that the income promises are fulfilled and therefore have the resources for the spending promises,” said López.

Macroeconomic estimates

For 2023, the SHCP projected a GDP of 3.0 percent. However, on Tuesday the World Bank forecast that the Mexican economy will grow 0.9 percent.

The analyst explained that if the GDP does not grow according to the estimates of the Treasury, the collection could be reduced in nominal and real terms; however, as a percentage of GDP they would grow slightly more.

For example, in 2020 when the Mexican economy fell 8.5% as a consequence of Covid-19, tax revenues represented 14.3% of GDP. The highest percentage achieved so far.

For inflation, the SHCP estimates that it would be at 3.2% at the end of 2023, less than the 4.2% projected by the Bank of Mexico. Inflation closed 2022 at 7.82%, the highest figure in the last 20 years for a year-end.

For the interest rate of the Bank of Mexico, a level of 8.5% is estimated from 10.50% at the end of 2022. In the case of the United States Fed, the rate could range between 4.25 and 4.50 percent.

budget revenue

In the General Criteria of Economic Policy 2023, it was stated that this year the income that is captured by taxes, oil and other concepts will be 22.7% of GDP, less than the 23.2% of GDP that was projected for 2022. With this estimate of the 2023, budget revenues would be at their lowest level since 2019, the first year of the current administration.

santiago.renteria@eleconomista.mx