Background on the Federal Revenue Law (LIF) 2026
On the evening of this Wednesday, the Mexican Senate approved in general terms the Federal Revenue Law (LIF) 2026. The law anticipates a domestic borrowing ceiling of 1.78 billion pesos for the following year, sparking discussions in the Senate’s upper chamber.
Key Figures and Relevance
The approval came with 79 votes in favor, 37 against, and no abstentions. Senator Miguel Ángel Yunes, a member of Morena, highlighted the law’s prudent macroeconomic assumptions and its orientation towards ensuring economic stability, strengthening state income, and enabling the fulfillment of essential public functions.
Expected Incomes and Sources
- Tax Incomes: The law projects a historical collection of 5.8 billion pesos, an increase of 6.5% compared to this year’s approved amount.
- Petroleum Incomes: The federal government anticipates 1.2 billion pesos from petroleum sources, a 1.9% annual increase.
- State Organisms and Enterprises: An estimated 1.2 billion pesos is expected from state organizations and enterprises, representing a 1.2% annual increase.
These income sources, according to Senator Yunes, form the central pillar of public financing.
Economic Growth and Financial Requirements
The estimates for the following year are based on an economic growth range of 1.8% to 2.8%. Meanwhile, the Requerimientos Financieros del Sector Público (RFSP) are projected at 4.1% of the Producto Interno Bruto (PIB).
Debt Concerns
Financial and Moral Debt
During their speeches, various legislators addressed the anticipated debt for the following year, estimated at 20.2 billion pesos—equivalent to 52.3% of the PIB.
- Priísta Cristina Ruiz: In seven years, Morena has doubled the public debt, effectively mortgaging the country’s future as finances now rely heavily on credit.
- Morenista Manuel Huerta Ladrón de Guevara: He urged senators to focus more on the moral debt owed to the people rather than financial debt.
Controversy Over Tax Concessions for Insurers
Following an amendment in the Chamber of Deputies that led to an agreement between the government and insurance companies to forgive past IVA taxes in exchange for proper payment of this tax starting this year, some opposition deputies expressed concern over perceived privileges for the economically powerful.
- Alejandra Barrales (Movimiento Ciudadano): She pointed out that while this agreement would generate an additional 25,000 million pesos in IVA revenue this year, it would also forgive approximately 180,000 million pesos to insurance companies.
- Waldo Fernández (Partido Verde Ecologista de México): He clarified that this was not a tax forgiveness, but rather a fiscal stimulus, emphasizing the importance of scrutinizing details.
Key Questions and Answers
- Q: What is the Mexican Senate’s Federal Revenue Law (LIF) 2026? A: The LIF 2026 is a law approved by the Mexican Senate that outlines expected incomes and borrowing limits for the following year.
- Q: What are the projected income sources and amounts for 2026? A: The law anticipates 10.1 billion pesos in total incomes, with 1.78 billion pesos from domestic financing and 15,500 million dollars from external credit. Tax incomes are projected at 5.8 billion pesos, petroleum incomes at 1.2 billion pesos, and state organisms and enterprises at 1.2 billion pesos.
- Q: What are the concerns regarding debt in the LIF 2026? A: Concerns revolve around the anticipated debt of 20.2 billion pesos, equivalent to 52.3% of the PIB, and the perceived mortgaging of the country’s future due to heavy reliance on credit.
- Q: What is the controversy surrounding tax concessions for insurance companies? A: The controversy stems from an agreement to forgive past IVA taxes owed by insurance companies in exchange for proper payment moving forward, with critics arguing it favors the economically powerful.
