September arrives and with it the delivery of the economic package for 2023 , where the federal government proposes to the Congress of the Union the determinations and updates for public spending and tax collection, as well as the macroeconomic projections that support said proposal.
When is the Economic Package 2023 delivered?
The delivery of the proposal for the Economic Package of the Ministry of Finance and Public Credit (SHCP) has a deadline of September 8 of each year, and the agency has reported that it will be next Thursday just when it is carried out.
This package consists of the General Economic Policy Criteria such as GDP estimation, oil price, inflation and reference interest rate; With these data, the Treasury estimates how much public revenue can be generated by taxes and the sale of oil, mainly considering the financial costs.
It also includes the initiative of the Federal Income Law (ILIF) in which the origin of public income and general guidelines of how they are going to be generated are stipulated. It is usually accompanied by the Tax Miscellaneous that proposes to add, remove, reduce or update taxes or deductions through changes to the VAT, ISR, IEPS and Federal Tax Code (CFF) tax laws.
The Federal Expenditure Budget Project (PPEF) stipulates how the money that is expected to be collected through taxes, duties, exploitation, oil sales and the acquisition of public debt will be spent.
A “balanced, responsible and realistic” package
Rogelio Ramírez de la O, Secretary of the Treasury, confirmed to legislators from the Morena Parliamentary Group in a plenary meeting on August 25 that the package will be “balanced, responsible and realistic,” and that there will be increases in social programs.
Public finance specialists consider that the design, proposal and approval of this package will face a complicated economic context in view of the post-Covid recovery and high inflation, in addition to pressures from unavoidable expenses such as: pensions, debt and transfer to states, and recently the obligation to comply with social programs.
Debt and pension pressures
Ramírez de la O has also accepted that the budgets of the great public works of the current government put pressure on the distribution of public resources.
“We hope that the entire macroeconomic environment at the national and international level is taken into account, to generate real variables, a realistic budget in growth variables, interest rates, that considers the inflation that has been observed, that it is considered that this will have a higher financial cost, that an adequate oil price be calculated, in addition to strengthening very important items that were greatly affected during and after the pandemic,” José Luis Clavellina, Director of Research at the CIEP, told Expansión.
Items such as health, education and security this year have reported declines compared to what was budgeted and spent last year. Treasury figures detail decreases of 5.9% in spending on education; in national security of 15.3% and in health of 1.9% from January to July compared to the same period last year.
A comparison made by Expansión reports that in the first semester, the expenditure that the public sector paid for interest on the debt was greater than the items of education, health and physical investment, which may increase in the following months due to the increase in the Bank of Mexico reference interest rate.
Collection and changes in taxes
To face financial pressures, the federal government must propose strategies to improve collection, since taxes are the main source of financing for the operation of the public sector; that is, hospitals, schools, social rehabilitation centers, sports and cultural centers, bridges, airports and highways, among many others.
The collection of taxes such as ISR, which is charged to workers and companies for their income, has been the largest generator of public income during the current administration, this year at the end of July it has generated income greater than that budgeted by 144,000 million pesos (mdp) and registered a real annual increase of 15.3%, spinning eight consecutive months of growth.
The hallmark of the current administration has been to collect tax debts from large companies; strengthen actions to prevent tax fraud due to actions such as the creation of ghost companies, but also greater vigilance by the treasury regarding taxpayer obligations.
More incentives and fewer fines
“We believe that the more incentives and facilities are given, these collection rates will increase, that it is not a persecution, that it is not an imposition of fines as exaggerated as those we see with the bill of lading, of 90,000 pesos is unsustainable for any business to pay a fine of that amount”, explained Laura Grajeda Trejo, president of the Mexican Institute of Public Accountants (IMCP).
Faced with the design, delivery, discussion and approval of the 2023 package, the accountants have met with legislators, they report that there is a long list of issues that must be reviewed and proposed to improve collection, especially focused on administrative simplification; “We are betting that this situation will occur,” reaffirmed the president of the IMCP.
tax changes
Grajeda explained that the new Simplified Trust Regime (Resico) needs more dissemination, and facilities so that taxpayers can make comparisons and decide if it is convenient for them to switch to this new scheme.
In terms of auditing, the controversy continues as to whether public accountants should inform the authority if they detect any type of tax fraud, because if they do not do so, they can be sanctioned or accused of being co-participants in tax crimes.
“We don’t even have the tools to do it, to cross-check information like the SAT, that determination must be eliminated or reformed, we hope that the authority is sensitive to the proposals,” said Grajeda.
Need to update deductions
As the current administration has passed, the limit for individuals to make personal deductions has been reduced, mainly because more concepts have been added to the general limit of 15% of gross income or five annual UMAS (175,000 pesos), and because of the high inflation.
“The deductions are very limited, it is enough to pay an expense or medical insurance to reach that limit, with the increase in prices in the last two years, there should be an update, for example, it is 20 years since the limit of 175,000 is not updated pesos for the purchase of a car, currently there is no car that costs that”, Virginia Ríos Hernández, member of the Technical Commission of Fiscal Investigation of the College of Public Accountants of Mexico (CCPM).
