Background on Claudia Sheinbaum and the Current Economic Situation
Claudia Sheinbaum, the President of Mexico City and a key figure in the national government, has declared that tax evasion is “unacceptable” and that her administration will put an end to fraudulent billing schemes, also known as “factureras.” This statement comes at a critical time when remittances from Mexican migrants in the United States have dropped by 5% this year, reaching their lowest levels since 2024. This dual challenge highlights the vulnerability of Mexico’s economy and underscores the urgent need to strengthen public finances.
Remittances and Their Importance
In 2024, Mexico received a record-breaking $64,745 million in remittances from its migrant population in the U.S., which has since declined due to stricter U.S. immigration policies. This shortfall of approximately $3,237 million has directly affected millions of the most vulnerable families who rely on these funds for basic necessities, rent, and education expenses. A single decision made across the border can have a devastating impact on these families, leaving them exposed to external factors beyond their control.
Tax Evasion: A Growing Problem
Meanwhile, tax evasion has emerged as an even more significant issue. In 2019, the Tax Administration Service (SAT) identified $354,512 million pesos in tax evasion. Additionally, the Fiscal Procurator’s Office estimated that between 2014 and 2018, approximately $2 trillion pesos were laundered through false invoices.
Former Federal Fiscal Procurator Carlos Romero Aranda estimated that tax evasion amounted to $500,000 million pesos annually. If this range is considered and projected from 2019 to 2024, the cumulative fiscal loss would be between $2.9 and $3.0 trillion pesos, demonstrating the extent of the fraud: a massive scheme that undermines the state and exposes governmental incapacity to curb it.
Sheinbaum’s Challenge and Previous Attempts
The combination of reduced remittances and increased tax evasion exposes the precarious state of public finances. To compensate for the lack of foreign currency inflows, the government must recover the billions lost to corruption and complicity. Sheinbaum’s approach aims to secure Mexico’s financial sovereignty by tackling tax evasion, but she faces formidable opposition from powerful interests that have profited from fiscal disarray for years.
It’s crucial to remember that former President Andrés Manuel López Obrador also pledged to eliminate “factureras” but failed to do so. Despite his anti-corruption rhetoric, tax evasion continued to cost the country hundreds of millions of pesos annually. Sheinbaum’s challenge is not merely to announce new initiatives but to achieve what her predecessor could not: genuinely close the $500,000 million pesos annual gap that drains public finances. Success in this endeavor would mark a historic turning point; failure would add another unfulfilled promise to the long list of broken commitments by her predecessors.
Key Questions and Answers
- What is the current state of remittances in Mexico? Remittances from Mexican migrants in the U.S. have dropped by 5% this year, causing a shortfall of approximately $3,237 million and affecting millions of vulnerable families.
- What is the issue with tax evasion in Mexico? Tax evasion has been a growing problem, with the SAT identifying $354,512 million pesos in tax evasion in 2019. Additionally, an estimated $2 trillion pesos were laundered through false invoices between 2014 and 2018.
- What are Claudia Sheinbaum’s plans to address these challenges? Sheinbaum has declared her intention to combat tax evasion, particularly fraudulent billing schemes (“factureras”), to strengthen public finances and secure Mexico’s financial sovereignty.
- Why is Sheinbaum’s task difficult? She faces opposition from powerful interests that have benefited from fiscal disarray for years. Her predecessor, Andrés Manuel López Obrador, also pledged to eliminate “factureras” but failed to do so.
- What are the potential outcomes if Sheinbaum succeeds or fails? Success would mark a historic turning point in tackling tax evasion and strengthening public finances. Failure would add another unfulfilled promise to the long list of broken commitments by her predecessors.
