SAT predicts that the gasoline subsidy could cost up to 400,000 mdp

According to the head of the Tax Administration System (SAT), Raquel Buenrostro Sánchez, fiscal incentives granted to gasoline would cost the federal government 356 billion pesos (mdp) and could reach up to 400,000 mdp by the end of 2022.

The fiscal stimulus granted by the government of President Andrés Manuel López Obrador is given in response to the increase in fuel prices on the international market due to the conflict between Russia and Ukraine, in order to control gasoline costs in the country.

This occurs through the non-collection of the Excise Tax on Production and Services (IEPS) for magna, premium and diesel gasolines, which would no longer collect 200,000 mdp for this year, while additional incentives granted to importers and fuel producers would no longer be charged 13,000 mdp per month, which gives a total of 156 thousand mdp at the end of this 2022.

In this way, if the stimuli are added to the IEPS and the additional stimuli, it gives a total of 356,000 mdp; however, at a press conference, Buenrostro Sánchez warned that this figure could increase to 400,000 mdp. He also recalled that last year, stimuli to gasoline and diesel cost the Mexican government about 104,000 mdp, that is, twice as much as estimated for this year.

If it reaches 400,000 mdp, this figure would be equivalent to double the investment of one of the mega-projects of the AMLO administration: the Mayan Train, for which 200,000 mdp will be allocated. Similarly, with this amount, two “Olmeca” refineries could be built in Dos Bocas, because according to the federal president, the cost of this refinery will be 9 billion dollars (more than 180 thousand mdp).

It should be noted that as of March of this year, the Ministry of Finance and Public Credit (SHCP) began to provide additional stimulus to fuel producers and importers, who can obtain refunds when crediting Income Tax (ISR) and Value Added Tax (VAT).

As for the fiscal stimulus to the IEPS, it has been maintained for five weeks in a row. The last update was given on April 9, when the SCHP reported that this stimulus would be retained until next Friday 22nd of this month for the Easter holidays.

However, the additional stimuli were maintained with a smaller amount: for diesel it is 2,8612 pesos per liter; for the magna it is 1,0225 pesos per liter and for the premium it is 0.1692 pesos. In this way, the Mexican population would be saving about 5.49 pesos per liter for magna gasoline; 4.63 pesos for premium and 6.03 pesos for diesel.

According to Raquel Buenrostro, these measures have a public safety benefit, since there is a stimulus for gasoline, “all incentives for smuggling are removed (...) They smuggle it (fuel) so as not to pay for IEPS, but right now nobody pays IEPS,” he said.

This, he commented, is reflected in the 5.6% increase in gasoline and diesel imports compared to the previous year. Similarly, in the first quarter of 2022, fuel smuggling totaled 16.9 million barrels, which represents a 32% decrease compared to the same period in 2021.

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