Tax collection continued to be the driver of budget revenues at the end of October, this is because oil revenues continue to present a double-digit drop compared to 2023, according to the latest monthly public finances and debt report. the Ministry of Finance and Public Credit (SHCP).
The federal government had total budget revenues of 6 trillion 186,712 million pesos between January and October 2024, a growth of 2.1% in real terms compared to the same period of the previous year and 1% above what was programmed by the government in the Law of Income of the Federation (LIF) 2024.
Oil revenues showed a real drop of 12.4% compared to the same period last year, to 829,272 million pesos, due to lower crude oil production and lower natural gas prices, the Treasury explained. Compared to what was programmed in the LIF, oil revenues were 7.9% below the goals.
Tax collection, the main source of budgetary income for the government, grew 5.3% in real terms in January-October 2024, totaling 4 trillion 80,976 million pesos, but was 0.59% below what was programmed by the government on the LIF of this year, due to lower collection of ISR and IEPS.
If tax revenues remain below the LIF goals at the end of 2024, in the six-year term of former President López Obrador only the collection scheduled during 2021 will have been met; In the other five years of the administration that has just concluded, tax collection did not meet the Treasury’s goals, according to an analysis by México Evalúa.
This contrasts with the six-year term of Enrique Peña Nieto, during which in five out of six years the collection was above the goals of the Federation Income Law; Only in 2013, tax revenues fell below schedule.
ISR collection falls short
The collection of Value Added Tax (VAT) increased 2.3%, to one trillion 149,185 million pesos, thanks to the “good performance of private consumption.” This was 4.6% above what was scheduled for the LIF.
While the Income Tax (ISR) grew 1.5%, to 2 billion 228,714 million pesos, according to the report, which in fact was 1.2% below the collection goal set by the SHCP.
The 33% growth in the collection of the Special Tax on Production and Services (IEPS) stands out, to 507,497 million pesos, thanks to the reduction of tax incentives for gasoline. Despite double-digit growth, IEPS collection was 13.1% below the federal government’s goals.
Oil income, at its lowest level since 1990
The organization México Evalúa highlighted that thanks to the condonations that have been made to Pemex and the reduction of the Right to Shared Profit (DUC), the distribution of oil income continues to be “unequal” and that in fact the income that received by the federal government from the state company are at their lowest level since 1990.
At the end of October 2024, the oil revenues received by the federal government from Pemex amounted to 132.5 billion pesos (the lowest level in 34 years), which represents a drop of 57.8% compared to last year and is barely 16% of oil income.
While Pemex kept the remaining 84% of the oil income, that is, 696,772 million pesos.
