Our strategy will continue to be to avoid a continuous erosion of the collection base and keep it close to 14% of GDP, we even think that it can still be increased to 15% of GDP”.
Gabriel Yorio, Undersecretary of Finance.
The government of Andrés Manuel López Obrador seeks to strengthen the so-called financial buffers for the next six-year term, this after in the midst of the Covid-19 crisis they were used almost entirely to avoid a drastic drop in public income, which would have affected spending and even, would have led to cuts in it.
The current administration intends to leave a shield to the new government, regardless of who comes to power, to face possible eventualities that affect the country’s public finances, for which an initiative was sent to strengthen the Fund for the Stabilization of Budgetary Income (FEIP). ) just the day the Economic Package 2023 was delivered.
“Although there is no Fiscal Miscellany, we are proposing to Congress that it allow us to have new sources of income for the FEIP. Currently, there is only surplus income to feed it but, before the stabilization funds, those surpluses go to three other items that are above the FEIP, so it is very difficult to put money into it, “he said in an interview with El Economista Gabriel Yorio González, Undersecretary of Finance and Public Credit (SHCP).
In accordance with an initiative of the Federal Executive to modify the Federal Budget and Treasury Responsibility Law, sent last week, it is proposed that, in the event that savings are generated in the item of the financial cost of the debt, this resource can be used to the FEIP.
These savings, explained the undersecretary of the Treasury, will be generated when the monetary policy begins to reduce interest rates, as it was in past years when the central banks kept the cost of money at low levels.
For example, at the end of last year there was an under-exercise in the financial cost item for 36,867 million pesos, that is, less was spent than expected.
“The second strategy is that they let us put other financial assets into the FEIP that can reinforce the resources for the new administration,” added the Undersecretary of Finance.
At the end of Enrique Peña Nieto’s six-year term, the FEIP had resources of 340.685 million pesos, which were almost entirely consumed in 2020, at the height of the Covid-19 pandemic.
At the end of the first half of this year, the fund had 24,986 million pesos, several analysts pointed out the vulnerability of public finances in the face of another episode of crisis such as the pandemic.
Although at the moment only a mechanism is being established to nurture the FEIP, Gabriel Yorio did not rule out analyzing something similar for the Income Stabilization Fund of the Federal Entities (FEIEF), which went from 108,039 million pesos at the end of the 2018 to 20,936 million pesos in the first half of this year. “We would have to see new strategies. Each of the funds has different natures”.
No more miscellaneous
For the following year, the government did not propose any significant change in tax matters, which is known as Fiscal Miscellaneous. It is committed to sustaining budget revenues through the modifications that have been made in past years, such as the elimination of tax write-offs and universal compensation, the collection of VAT and ISR in transactions and/or income generated on digital platforms, the reform against invoices, among other changes.
“Without tax reform, we managed to increase revenue by two points of GDP. There will be no increase or creation of taxes in the remainder of the administration. Our strategy will continue to be to avoid a continuous erosion of the collection base and keep it close to 14% of GDP, we even think that it can still be increased to 15% of GDP”, he explained.
In this sense, and being a presidential election year, Yorio González ruled out that, even in 2024, a Fiscal Miscellaneous be proposed.
Waiting for the global minimum tax
Regarding the Global Minimum Tax, which has been an effort by the member countries of the Organization for Economic Cooperation and Development (OECD) to confront the conduct of multinational companies that allow them to pay lower taxes, Yorio González pointed out that this is I would see until the next administration.
“I think it would be up to the next administration for the times in which the OECD has discussed it. They are two pillars, which had advanced very well in the last year; however, we have not been able to generate a consensus, so it is taking more time for us to find the way or the mechanisms in which each of the countries would have to interact in order to establish it.”
ana.martinez@eleconomista.mx
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