# Mexico fiscal policy and fuel tax debates > Live situation record from CLSTR: https://clstr.news/situations/mexico-fiscal-policy-and-fuel-tax-debates > Updated: 2026-08-13T15:31:34.000Z. Sources: 4. Developments: 2. Mexico is facing fiscal debates regarding tax reforms and fuel subsidies. The National Action Party (PAN) proposed reducing the value-added tax (IVA) from 16% to 10% to stimulate consumption, though analysts warned this could further shrink public revenues in a country with already low tax collection rates. Simultaneously, the government has utilized the Special Tax on Production and Services (IEPS) to manage fuel costs, incurring approximately 42 billion pesos in subsidies during the first half of 2026. However, a finance ministry proposal to end these IEPS fuel stimuli after 2027 has raised economic concerns. The Mexican Institute of Finance Executives (IMEF) Veracruz warned that removing these stimuli to mitigate the national deficit could cause gasoline prices to reach 30 pesos per liter. Such a hike could trigger inflationary pressure by increasing logistics and transportation costs for basic consumer goods. ## Timeline ### 2026-08-13: IMEF warns gasoline price hikes if IEPS stimulus is removed IMEF Veracruz warns that removing the IEPS gasoline tax stimulus in 2027 could drive fuel prices to 30 pesos per liter and trigger widespread inflation in Mexico. 4 sources. https://clstr.news/cluster/imef-warns-gasoline-price-hikes-if-ieps-stimulus-is-removed ### 2026-07-29: Mexico Treasury Faces Revenue Impact from Proposed IVA Cut and IEPS Changes PAN proposes cutting Mexico's IVA to 10%, while the Treasury reports modest tax growth, higher VAT, falling ISR, and IEPS fuel tax changes costing billions, with a planned end to IEPS subsidies after 2027. 7 sources. https://clstr.news/cluster/mexico-plans-to-end-fuel-tax-subsidies-amid-broader-fiscal-reform-debate --- Cite as: Mexico fiscal policy and fuel tax debates. CLSTR, https://clstr.news/situations/mexico-fiscal-policy-and-fuel-tax-debates