Reduces tax incentives for gasoline and diesel

Mexico.- The Ministry of Finance and Public Credit (SHCP) will increase the IEPS tax rate that applies to Magna, Premium gasoline and diesel fuel for the week which runs from Saturday, July 21st to Friday, July 27th, as part of the adjustment done weekly and published in the Official Gazette of the Federation (DOF) every Friday.

According to the data of Expansion, for Magna gasoline, a tax of 2.76 pesos per liter will be charged, week that is about to end, the quota was 2.27 pesos per liter. For premium gasoline, the quota went from 2.75 pesos per liter to 3.16 pesos. And for diesel, the amount went from 2.68 pesos to 3.21 pesos.

Increases in these quotas began from the week of July 14 to 20, when the Magna rose from 1.98 pesos to 2.27 pesos per liter; for the premium of 2.45 pesos to 2.75 pesos, and for the diesel which went from 2.32 pesos to 2.68 pesos

The increase occurs after the price of the. US gasoline declined and the peso strengthened against the dollar after the elections, two of the main factors that determine the price of fuels in Mexico, when it is imported more than 70% of the gasoline consumed in the country, said Arturo Carranza, energy specialist of the National Institute of Public Administration (INAP)

"What we can interpret is that the Treasury wants to recover some of what it has stopped collecting by reducing the IEPS rate to gasoline up to now this year, especially in May, when the price of gasoline in the United States peaked, "said the specialist.

In May, the IEPS rate charged to gasoline was 1.12 pesos per liter for Magna gasoline, in the week of May 26 to June 1, represented a reduction of 75.56% at the rate of IEPS

The tax that must be collected at the l. origin is 4.59 pesos per liter of Magna, of 3.88 pesos per liter of Premium and 5.04 per liter of diesel, but the government lowers the fees with the aim of mitigating the 39, the impact of rising oil prices worldwide and the rise in the exchange rate.

It is estimated that the Treasury stopped collecting 15.159 million pesos between January and May at the same time. Last year, this represented a drop of 21.4%.

In 2017, with the liberalization of the fuel market, the Treasury expected to impose a fixed IEPS quota over the next few years. But until now, the IEPS quota on gasoline drops or increases each week depending on the behavior of the factors that influence its price.

For this year, the Treasury expects to stop the collection of 107,816 million pesos, to soften the increases in fuel prices.