The collection of the Value Added Tax (VAT) was 291,667 million pesos in the first three months of 2022, this is 9.3% real less compared to the same period of 2021. This is the most pronounced contraction since the first quarter of 2009 when it was -19.9% real.
VAT collection in the first three months of 2022 revealed that they are the first two quarters with annual contractions in the collection of said tax. In the first quarter of 2021, a real drop of 3.2 percent was observed.
The contraction in VAT collection is a sign that the Mexican economy has not yet recovered from the Covid-19 pandemic because talking about said tax is talking about consumption, Janneth Quiroz Zamora, deputy director of economic analysis at Monex, said in an interview.
“It is most likely that the (economic) recovery will last until 2023, this is because we start from the fact that the economy became smaller with the crisis and still has not reached the levels of two years ago,” said Quiroz.
The specialist added that such high inflationary pressures cause the loss of purchasing power of Mexican families and although the salary increases that have been given in this administration are good, they can generate inflationary pressures.
“In these complex circumstances for inflation, raising wages along with inflation would only generate greater inflationary pressures,” he commented.
During March, inflation was 7.45%, the highest figure since January 2001, according to the National Institute of Statistics and Geography (Inegi).
Regarding VAT collection, legal entities and individuals contributed 281,865 and 9,801 million pesos, respectively, according to the “Report on the Economic Situation, Public Finances and Public Debt”, presented by the Ministry of Treasury and Public Credit (SHCP) this Friday.
In VAT collection by economic sector, financial and insurance services contributed the largest amount, with 29,059 million pesos. Followed by professional, scientific and technical services with 20,920 million pesos; business support services and waste management and remediation services, with 16,982 million pesos, and retail trade with 16,646 million pesos.
VAT returns
Meanwhile, the total number of taxpayers who submitted their declaration with payment of VAT amounted to 1.5 million taxpayers. There were 421,572 legal entities that filed a declaration, while 1.1 million natural persons filed a declaration, informed the Treasury.
For its part, the Tax Administration Service (SAT) announced that the number of tax refunds paid in the January-March period was 117,298. This is an annual increase of 32.8% or 28,952 returns.
The SAT maintains that the average payment time in returns decreased 1.3 days compared to 2021, going from 17.9 days to 16.6 days. While for large taxpayers it is 23 days, this is 17 days below what is established in the Federal Tax Code (40 business days).