EconomyTax collection stagnates, but government spending increases

Tax collection stagnates, but government spending increases

The arrival of resources to the federal public coffers through the collection of taxes stagnated in the first five months of the year, however expenses maintained their upward trend, according to data from the Ministry of Finance published this Wednesday.

Tax revenues, from the collection of taxes such as VAT, ISR and IEPS, grew only 0.3% in the January-May period and compared to the same months of 2020, when the spread of the coronavirus forced the closure of economic activities and decreased mobility.

The Ministry of Finance updated its timely figures at the end of May, where a real annual growth of just 0.2% stands out in the collection of ISR, the tax that is charged on company profits, and gives a reference to economic activity.

The VAT, which is charged to producers and the final consumer for the purchase of goods and services, grew 5%, while the IEPS charged to gasoline and diesel decreased 13.4%, and that charged to products that are harmful to the health like tobacco; alcoholic drinks; High-calorie foods and beverages fell 0.4% in real annual terms in the first five months of the year.

However, only in May there is a recovery with a real annual growth of 18.5% in tax revenues, in this comparison the VAT was the one that showed the greatest dynamism with a real annual increase of 38.9%, according to data from the Treasury.

Expenses are on the rise

Total public spending in the public sector increased 4.0% between January and May 2021 compared to the same period last year.

Within programmable spending, one of the concepts that grew the most was that of materials and supplies for the operation of the public sector with an increase of 49.7%. The concept “other capital expenditures” grew 159.7%.

Spending on physical investment, which is used for the development of social and economic infrastructure, fell 9.6% in January-May. Only in May, this concept fell a real annual 29.7%.

Concepts of mandatory payments such as the financial cost of public debt decreased 13% and participation to the states decreased 1.4%, the expense for pensions grew 2.4%, detailed figures from the Treasury.

With information from Dainzú Patiño.

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