The Value Added Tax (VAT) became, in 2021, the lifeline of tax revenue. According to preliminary data from the Tax Administration Service (SAT), this tax not only had a considerable increase in its collection compared to the previous year, but also exceeded the goal established in the Federal Revenue Law (LIF).
Last year, amid the reactivation of the economy due to the situation of the pandemic by Covid-19, the VAT left a collection of 1 trillion 122,264 million pesos, which represented an increase of 7.7% compared to 2021 , according to preliminary data from the SAT.
In addition to the considerable increase, the tax exceeded by 14.6% the goal set in the LIF of 978,946 million pesos. This, analysts explained, was due to the reactivation of the economy since VAT is a tax that is linked to the consumption of goods and services.
“To the extent that there is a higher consumption, higher sales, then there will also be a higher collection. In addition, VAT is one of the taxes that have the least tax evasion. It must also be considered that last year we had a fairly significant drop in collection, so the effect of comparing the base favors it, “said Janneth Quiroz, deputy director of Economic Analysis at Monex.
However, for this year things could change. James Salazar, deputy director of Economic Analysis at CIBanco, pointed out that the trend could change due to the appearance of new Covid-19 variables, as well as a very optimistic growth expectation for this year, of 4.1 percent.
Another tax that performed better than expected was the Foreign Trade Tax (ICE). According to the LIF, 61,638 million pesos were expected, while the collection observed at the end of 2021 was 75,389 million.
The ICE, Janneth Quiroz added, also benefited from the reactivation of the economy and the recovery of the peso against the dollar, after the episodes of volatility that occurred at the beginning of the pandemic. “Having had a more stable currency, with a year with less volatility compared to 2020, allowed Mexicans to have a greater consumption.”
Different story for ISR and IEPS
The story was different for the Special Tax on Production and Services (IEPS) and the Income Tax (ISR). In the first case, the treasury obtained 400,726 million pesos for the tax, 17.5% less in annual comparison, and 21.5% below the LIF goal.
This, James Salazar recalled, is due to the fact that last year, given the recovery in the price of oil, the Ministry of Finance granted fiscal incentives to gasoline so that the price of these would not affect the pocket of consumers so much.
For its part, ISR collected 1 trillion 892,388 million pesos, 1.7% more than in 2020, but 0.9% less than that estimated by the Ministry of Finance for the year.
“It is explained by the performance of the private sector, whether due to earnings or employment. What we saw in the year is that although employment recovered, informal employment did much faster, ”said Janneth Quiroz.