IEPS: what is the special tax on production and services?

The Special Tax on Production and Services (IEPS) It is the tax that is paid for the production and sale or importation of gasoline, alcohol, beer, flavored beverages, tobacco or food with a high caloric content.

According to Tax Administration Service (SAT), the IEPS, like the Value Added Tax, is an indirect tax. This means that taxpayers do not pay it directly, but transfer or charge their clients (except for imports) and the taxpayer only reports it to the treasury.

For example, the IEPS tax for flavored beverages (juices or soft drinks) this year is 1.39 pesos per liter. To the cigars and cigarsIn addition to a rate of 160%, a fee of 0.54 pesos per 0.75 grams is applied.

The fees of the alcoholic drinks They depend on the degree of alcohol content. If a bottle has an alcohol content of up to 14º, the rate will be 26.5%; over 14º and up to 20º, the rate is 30%; if the alcohol content is over 20º, the rate will be 53 percent.

In this context of IEPSAre the gasoline who have been the most popular this year given the fiscal stimulus that the government applies to cushion the movements of international oil reference prices.

In recent weeks there has been a 100% fiscal stimulus on gasoline magna, premium and diesel. This means that they will stop collecting 5.4917 pesos per liter, 4.6375 pesos per liter and 6.0354 pesos per liter, respectively from the IEPS.

A complementary fiscal stimulus was also revealed for taxpayers who are the producers and importers of fuels, said stimulus will have an impact on all subsequent operations benefiting the final consumer, according to the Ministry of Finance and Public Credit.

“The aim is to maintain adequate control of first-hand sales, which will allow expedited returns and avoid increases in the price of automotive fuels. In this way, the economy of Mexican households is protected”, according to the SHCP.

The SAT projected that the complementary fiscal stimulus in 2022 will be 13,000 million pesos per month on average.

The Tax Administration Service foresees that the tax incentives for gasoline will be between 350,000 and 400,000 million pesos (mdp) for this year; this is almost three times more than the 104,076 million pesos of 2021.

In the presentation of Tax Management Report for the First Quarter it was reported that the fiscal stimulus for gasoline was 48,550 million pesos, in the period. The figure is 12 times higher than that registered in the first quarter of 2021 (3,992 million pesos).

Raquel Buenrostro Sánchez, head of the SATexplained on Wednesday at a press conference that the Mexican government, unlike other countries that opted for a more orthodox policy to face the rise in international oil prices, implemented an anti-inflationary policy, in which the treasury contributes through of the stimulus to diesel and gasoline.

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