Mexico's Tax Revenue Strategy

MEXICO CITY (Reuters) – President Claudia Sheinbaum announced on Friday that Mexico has the capacity to increase tax revenues next year without implementing major fiscal reforms. Her government will soon present its budget proposal.

Sheinbaum mentioned strategies to enhance revenues collected by the tax agency SAT and through customs. She asserted, "If additional reforms are necessary, we'll work on it through next year," highlighting that there are still numerous opportunities to raise revenue without a deep overhaul of the fiscal system.

These comments follow Moody's recent downgrade of Mexico's outlook from stable to negative, which Sheinbaum dismissed. The ratings agency raised concerns about institutional and policy weaknesses that could affect both the economy and government finances.

Facing Mexico's largest budget deficit since the 1980s, analysts are questioning Sheinbaum’s ability to fulfill her campaign promises of increasing welfare and the minimum wage while managing the deficit. Both Sheinbaum and her finance minister have emphasized that the upcoming budget must focus on significant deficit reduction.