Economic Slowdown and Tax Revenue Growth
While Mexico’s economy is experiencing a noticeable slowdown, the government has achieved an increasing tax revenue collection. This growth is remarkable as it’s been accomplished without raising or introducing new taxes.
The contrast between the low growth and the rising tax revenue is striking, as it has exceeded 100% of what the government projected for the period.
Economic Growth Context
According to the National Institute of Statistics and Geography (INEGI), Mexico’s economy grew by 0.2% trimestral (compared to the fourth quarter of 2024) and 0.6% annually (compared to the first quarter of 2024).
- Secondary activities (industry, manufacturing, and construction) contracted by -0.3% trimestral and -1.4% annually, reflecting weakness in construction and mining.
- Tertiary activities (services and commerce) showed trimestral stagnation (0% growth) and a modest annual growth of 1.3%, saving the overall economy from technical recession.
Agricultural, livestock, and fishing primary activities grew by 8.1% trimestral and 6.7% annually, driven by a significant increase in agricultural production, the highest since 2011.
Although there are no figures for May yet, it’s likely that the accumulated economic growth over the first five months will be very low.
Tax Revenue Growth
In parallel, the SAT has been reporting an upward trend in tax revenue collection.
The Servicio de Administración Tributaria (SAT) boasted yesterday that tax revenue collection reached a total of 2.4 trillion pesos.
- This amount represents an 8.8% increase in percentage terms and a nominal increase of 278,139 million pesos compared to the same period in 2024.
- The SAT highlighted that these figures consolidate tax revenue collection, surpassing what was planned in the period by the Federal Income Law 2025, with a compliance rate of 103.5%.
In detail, the organization reported that between January and May, 1.371 trillion pesos were collected through the Income Tax (ISR).
- This amount represents 149,902 million pesos more than in the same period of 2024 and a real increase of 8.1%.
Regarding the resources obtained from the Value-Added Tax (IVA), they reached 653,542 million pesos; 94,413 million more than in the same period of the previous year and a real growth of 12.5%.
The collection of the Special Production and Services Tax (IEPS) amounted to 268,447 million pesos, 7,130 million more than in the same period of 2024. These are indeed good figures, and it’s positive news that tax revenue collection is increasing despite the economic slowdown and stagnation.
Comparison with Previous Years
Compared to 2024 (+5.8%) and 2023 (+4.1%), the growth in 2025 is notable, but it’s inferior to 2013 (+17%) during Enrique Peña Nieto’s term due to the fiscal reform he implemented.
Factors Behind Tax Revenue Growth
The SAT’s efficiency, digitalization, consumer resilience, and peso depreciation explain the tax revenue growth in the current term.
However, the limited fiscal margin available to Claudia Sheinbaum’s government underscores the growing need for a structural fiscal reform to ensure macroeconomic stability.
Recently, BBVA Bancomer’s chief economist, Carlos Serrano, stated that without a fiscal reform, Mexico might lose its investment-grade status by 2027.
