Mexico's 2027 Economic Package targets debt and tax reforms

Mexico's 2027 Economic Package, presented to Congress, outlines a fiscal strategy focused on maintaining social programs and infrastructure investment while facing rising debt and revenue challenges. The proposal projects a public debt of approximately 21.6 trillion pesos, driven by a projected 14.4% decline in oil revenues and the need to fund social welfare programs, such as the Senior Citizen Pension, which is allocated 543.5 billion pesos.

To bolster revenue without raising general tax rates, the government aims to increase tax collection to 15.9% of GDP through stricter oversight and limits on deductions. A key proposal involves capping corporate deductions at 96.67% of income, a move that could effectively act as a minimum tax of roughly 1% of sales, even for companies reporting losses. This has drawn criticism from business groups like UNIDEM, who warn it could harm exporters with thin margins.

Additionally, the package seeks to expand the Simplified Trust Regime for small taxpayers. However, analysts from the CIEP and various political figures have expressed concern that the plan postpones necessary fiscal consolidation and increases debt risks, especially if economic growth falls below the government's projected 1.5% to 2.5% range.