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Mexican fiscal policy and administrative challenges

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2026-09-11 02:33 UTC → 2026-09-11 17:55 UTC · added ~~removed~~

Mexico is facing scrutiny regarding its fiscal policies and administrative management. The Ministry of Economy has defended the federal government against a United States Trade Representative investigation into manufacturing excess capacity, arguing that national fiscal constraints prevent widespread industrial subsidies. Officials noted that Mexico’s federal budget is below 25% of its GDP, which is lower than both the United States and the OECD average. Domestic criticism has intensified as legal experts, such as tax attorney Adolfo Solís Farías, allege the government has replaced structured fiscal policy with “repressive and discretionary mechanisms” to increase revenue, warning that social programs may be used as political tools. At the municipal level, business groups are demanding reforms to address high operational costs and the misallocation of budgets. In La Coalia, leaders noted that nearly 90% of the municipal budget is consumed by payroll and operational costs, leaving less than 10% for public works. In Cuernavaca, the Consejo Coordinador Empresarial has urged merchants to report extortion and “abuses of power by municipal inspectors.” ~~As part of~~ To address economic challenges, President Claudia Sheinbaum has introduced the 2027 Economic Package, ~~President Claudia Sheinbaum and SAT head Antonio Martínez Dagnino have detailed specific~~ featuring reforms to support micro, small, and medium-sized enterprises (MSMEs). Key proposals for the Simplified Trust Regime (RESICO) include increasing annual income limits for individuals from 3.5 to 5 million pesos and for companies from 35 to 50 million pesos. For the primary sector, the ISR-exempt income limit would rise to 1 million pesos. To simplify Value Added Tax (IVA) compliance, small businesses may opt for a simplified scheme with a 7 percent effective rate. Additionally, the IMSS plans to digitize registrations to reduce bureaucracy, specifically reducing registration fields from 80 to 14 through digital integration with the SAT, while NAFIN will offer various credit modalities to support growth.

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