September 17th, 2021
1. Increase revenues by 7%, Tax Administration Service goal for 2022
Raquel Buenrostro Sánchez, Head of the Tax Administration Service (SAT), declared that tax reform is not needed to significantly improve government collection. She indicated that more effort should be made to combat large informal entities and implement more aggressive fiscal oversight, for which collaboration with other countries is key, especially the U.S. She added that the goal for 2022 is to increase collection by 7%, that is, MXN $ 3.7 trillion (USD $ 185 million).
The Center for Economic and Budgetary Research (CIEP) pointed out that, in the absence of comprehensive tax reform, which was expected this year, tax revenues may be maintained or even increase as a percentage of Domestic Product Gross (GDP), but they will be insufficient to meet spending needs. Héctor Villarreal, Director General of CIEP, added that he does not believe comprehensive tax reform will be implemented in the remaining six-year presidential term, since efforts will probably be focused on combating tax evasion and dodging.
2. Outsourcing reform boosts employment
Indicators from the Mexican Institute of Social Security (IMSS) report that outsourcing reform boosted formal employment in August by 128,900 persons affiliated to the IMSS. Likewise, it grew the number of companies to 9,259, the highest figure to date. The Deputy Governor of the Bank of Mexico, Gerardo Esquivel, noted that with these figures replace practically all the private formal jobs lost from May to June 2020. He also stressed that this recovery was quicker than in previous major crises.
Jorge Pérez Izquierdo, Director of PAE, a company specializing in human capital, affirmed that, for productivity purposes, companies will go back to looking for providers that can guarantee specialized services. This means the same number of assigned employees will be registered through specialized services, depending on how the reform is implemented.
3. Mexico’s competitiveness levels fall
According to the 2021 International Competitiveness Index (ICI) conducted by the Mexican Institute for Competitiveness (IMCO), Mexico ranked 37 of 43 global economies for competitiveness. It dropped two spots since 2020 and entered the category of low competitiveness. This is the third consecutive year in which Mexico’s position dropped and the first time in 16 years that it ranked outside the list of medium competitive countries.
Mexico improved its economic and market indicators; maintained its law, government, and precursor indicators; and dropped in environment, society, political system, innovation, and international relations. Valeria Moy, General Director of IMCO, pointed out that the country needs to create conditions to achieve greater productivity and generate well-being for its inhabitants. This will only be achieved if it consistently attracts talent and investment.
4. CFE pursues projects with private sector
Despite public discourse against privatizing the energy sector, electricity reforms proposed by President Andrés Manuel López Obrador would create partnerships with the private sector in new plants that would allow the state to retain control of 54% of electricity generation in the market. The Federal Electricity Commission (CFE) would share associated investment financing, development and execution risks, best industry practices, and technical, legal, economic, and market capacities with the private sector in these projects.
Likewise, CFEnergía called for the private sector to build and operate a pipeline from Chinameca, Veracruz, to Salina Cruz, Oaxaca. The project also includes new port facilities and a liquefaction plant to export natural gas to Asia. The private company will make all the investments and retain ownership of the assets while CFEnergía will sell the gas to the private company for export purposes.
El Universal: CFE busca construir centrales eléctricas con la IP.
El Diario: Ahora la CFE busca a IP para construir ducto.
5. The President asks the U.S. to end Cuba’s blockade
The official Mexican Independence commemoration ceremony had a special guest: Miguel Díaz-Canel, President of Cuba. His participation was rejected by opposition leaders. During the ceremony, President Andrés Manuel López Obrador asked the U.S. government to lift the blockade of Cuba. He stressed that no state has the right to subdue another and that the blockade’s negative effects on the well-being of the Cuban people “looks bad.”
President Díaz-Canel celebrated the friendship between Mexico and Cuba. He stressed that his country “will always remember” the Mexican government’s support in the face of the economic blockade. He thanked Mexico for sending medical supplies to the island to combat the COVID-19 pandemic and for demanding the blockade be lifted, thereby turning the annual United Nations (UN) vote into concrete action.