Tax Collection in Mexico Grows Despite Economic Slowdown
In the first five months of 2024, federal tax collection in Mexico showed solid progress, surpassing 2.41 trillion pesos and recording an annual increase of 8.8%. These figures, released by the Tax Administration Service (SAT), reflect a strong performance in tax revenues, despite an economic environment marked by signs of stagnation and decreased momentum in the nation’s productive activity.
Among the main taxes, the Income Tax (ISR) was the primary source of revenue, totaling 1.37 trillion pesos and growing by 8% compared to the same period in 2023. Meanwhile, Value Added Tax (VAT)—which is levied on consumption—grew by 12.5%, amounting to 653.54 billion pesos. The Special Tax on Production and Services (IEPS), which targets specific products such as fuels and tobacco, reached 268.45 billion pesos, representing a year-over-year increase of just over 7.13 billion pesos.
The total tax collection not only surpassed the estimates outlined in the Federal Revenue Law for the period (comfortably meeting 103.5% of the target), but also stands in contrast to the slowdown in Gross Domestic Product (GDP), revealing a gap between government and international forecasts. For 2024, the Ministry of Finance and Public Credit expects economic growth between 1.5% and 2.3% (with a mid-point of 1.9%), while the Organization for Economic Cooperation and Development (OECD) has cut its estimate to just 0.4%—a significant difference that could have adverse effects on the availability of public resources.
SAT’s strategy, outlined in the 2025 Master Plan, has emphasized strengthening tax collection through tighter controls, increased oversight, and strategies to fight tax evasion, all of which have contributed to the positive results seen so far. However, the persistent economic slowdown could limit the government’s ability to sustain this pace of revenue in the medium term, especially if consumption and investment continue to soften, putting downward pressure on tax revenues.
If the gap between sustained tax collection and lower economic activity persists, the government may be forced to adjust its budget forecasts and rationalize spending, especially given ongoing structural challenges such as labor informality, low productivity, and a reliance on oil revenues.
In summary, the strength shown by tax collection so far this year has become a positive factor for public finances, but there remains a pressing need for vigilance and adaptation amid an uncertain economic outlook—where achieving revenue and growth targets will largely depend on the economy’s performance in the coming months.
