2027 Economic Package: Collecting More Without Raising Taxes, the Great Challenge for Mexico's Public Finances

The presentation of the 2027 Economic Package gives a clearer view of where Mexican fiscal policy is heading. As every year, the first reactions tend to focus on the big numbers: how much the economy is expected to grow, how much the Government intends to collect and spend, and what the deficit and debt levels will be. Behind those numbers, however, there is a public policy decision that I find far more relevant.

Mexico seeks to increase revenue without resorting, for now, to a traditional tax reform based on creating new general taxes or raising existing rates. The bet is to obtain more resources from the current tax system: improving enforcement, making more intensive use of available information, controlling certain deductions, increasing the role of third parties in tax withholding, fighting non-existent or simulated transactions and closing gaps for evasion and avoidance.

This strategy must be analyzed together with the other half of the equation: public spending that maintains major commitments to social welfare, pensions and infrastructure, while the Government seeks to move gradually toward fiscal consolidation in a responsible manner. The package is also a clear signal of how the Mexican State intends to relate to companies and taxpayers in the coming years.

A moderate economic scenario

The 2027 General Economic Policy Criteria assume real GDP growth of between 1.5% and 2.5% with estimated year-end inflation of 3%, an exchange rate of 18 pesos per dollar, a 28-day CETES rate of 6% and an average Mexican oil mix price of 61.8 dollars per barrel. This is not a scenario built on extraordinary economic expansion, which makes the performance of public revenue even more relevant.

On the fiscal side, the Ministry of Finance projects a budget deficit of 3.4% of GDP with Public Sector Borrowing Requirements of 3.9%, a primary surplus of 0.6% and a historical balance of those requirements equal to 55% of GDP. Fiscal consolidation does not mean eliminating the deficit immediately or making across-the-board spending cuts, but gradually reducing imbalances and stabilizing the debt trajectory.

To achieve this, one variable is particularly important: revenue. The Ministry of Finance estimates that tax revenue could reach 15.9% of GDP supported by enforcement measures, the fight against tax crimes, the closing of avoidance gaps and easier compliance. In my view, this is one of the key numbers in the package.

More than 10.6 trillion pesos in revenue

The 2027 Federal Revenue Law bill estimates total revenue of 10.636 trillion pesos of which around 6.264 trillion would come from taxes. Income tax (ISR) would remain the main federal tax, at close to 3.289 trillion; VAT would contribute about 1.768 trillion; the special tax on production and services (IEPS), around 828 billion; and foreign trade taxes, about 232.5 billion.

These figures confirm a structural shift: tax revenue is becoming increasingly important in financing the State. But the package also includes about 1.48 trillion pesos in financing, so the 2027 strategy combines three elements that must be kept in balance: revenue, spending and borrowing in a sustainable way.

Income tax: a two-speed reform

On one hand, there are measures to simplify and expand the Simplified Trust Regime known as RESICO. For individuals, the annual income limit would rise from 3.5 to 5 million pesos, and certain taxpayers could return to the regime after getting current. For companies, the limit would increase from 35 to 50 million pesos. The message is to make compliance easier and broaden the potential taxpayer base.

But there is a second track that is far more relevant for larger companies: a new mechanism to control deductions for companies with revenue above 50 million pesos. When deductions are equal to or below 96.67% of taxable income, only 99% of them could be applied; when they exceed that percentage, the maximum deductible amount would be exactly 96.67% of taxable income. Amounts not deducted could be used over the following 20 tax years.

The statement of purpose links the measure to detecting fake invoices, artificial items, non-business expenses and aggressive tax planning. A tax reform is traditionally associated with raising a rate, but there is another way to increase revenue: controlling the base on which the tax is calculated. For companies, this calls for much closer attention to the quality of deductions, their documentation, their link to the business and their substance.

Enforcement is getting closer to the transaction

The Revenue Law proposes a 2.5% income tax withholding for certain companies earning income through digital platforms, which could reach 20% when they do not provide a tax ID (RFC). For VAT, withholding of 50% with an RFC and 100% without one is proposed, along with other cases involving foreign residents and payments deposited in accounts outside Mexico.

Beyond the percentages, the logic is what matters. In the traditional model, the taxpayer carries out the transaction, determines the tax, files and pays. The new model brings the authority closer to the moment of the transaction: a third party withholds, reports and pays the SAT, reducing room for non-compliance. In addition, the SAT will have to implement a verification program for taxpayers under Title III of the Income Tax Law, so enforcement is no longer focused only on large taxpayers.

From reviewing returns to reconstructing transactions

After working for more than two decades at the SAT, I believe this is one of the elements business owners and boards should watch most closely. The authority has electronic invoices (CFDI), returns, bank information where legally applicable, foreign trade operations, third-party information and withholdings that allow it to build risk profiles and cross-check data.

That is why the concept of compliance is also changing. Having a CFDI no longer necessarily settles the discussion about a transaction: the company must be able to prove that what was recorded actually happened, that there is an economic reason behind it and that documents, payments, accounting and physical movements tell a consistent story. Substance, traceability and business purpose are becoming matters of corporate governance and risk management.

Fees: not everything is an increase

The reform to the Federal Fees Law proposes increases in certain immigration and consular services, airspace use and railway infrastructure: a 35% increase in a specific immigration fee, 66% and 153% in certain visa services, 10% for airspace use and, for certain railway operators, a consideration rising from 1.25% to 3% of gross revenue.

However, a 12% reduction is proposed for certain radio spectrum bands to encourage investment, infrastructure and coverage. Fees can also be used as an economic policy tool: raising them where they lag behind the cost of the service and lowering them where investment is to be encouraged.

Where will the money be spent?

The Expenditure Budget sets total net spending of 10.636 trillion pesos and a deficit of about 1.359 trillion. Priority social programs exceed one trillion pesos led by the Pension for Older Adults, at about 543.5 billion, and the Benito Juárez Scholarships, at 190.6 billion.

Two figures illustrate the structural pressures: pensions and retirement benefits would reach about 1.841 trillion pesos and financial costs 1.575 trillion; together, more than 3.4 trillion pesos per year. As mandatory spending grows, the room to reallocate resources shrinks, so the discussion on revenue cannot be separated from the discussion on spending.

Even so, the package keeps betting on infrastructure: physical investment would rise about 3.5% in real terms to nearly 1.027 trillion pesos, with priorities in railways, energy, water, roads and logistics. Priority railway projects total about 150.9 billion pesos.

Tariffs are also part of the strategy

Although the tariff report is not a tax reform for 2027, it shows the direction of Mexico's industrial policy. During the reported period, tariffs were modified for 185 tariff items in sectors such as chemicals, cosmetics, paper, textiles, steel, aluminum, auto parts, electrical equipment, bicycles and furniture, and the Sectoral Promotion Programs for the electrical, electronics and automotive industries were adjusted.

The logic appears to be protecting certain domestic products from external pressures while keeping mechanisms that allow industry to access inputs competitively. Tariffs are thus becoming an increasingly visible industrial policy tool with consequences for investment, the location of supply chains, local content and nearshoring.

An ambitious equation

If we summarized the package in a single equation, it would be: higher revenue + welfare + public investment + growth + gradual fiscal consolidation. Each component affects the others. According to the Criteria themselves, a 100 basis point rise in interest rates would add about 37.9 billion pesos in financial costs, while an additional half point of growth could generate about 30.2 billion pesos in additional tax revenue.

What should companies do?

My conclusion would not be to simply prepare to pay more taxes. Companies need to strengthen tax risk management within the organization. They should ask whether they can properly support their deductions, whether they know their suppliers, whether there is substance behind their transactions, whether transactions have a business purpose and whether invoices, contracts, bank records, accounting and returns are consistent.

The authority can better select whom to audit, which allows for more efficient enforcement but also means inconsistencies can be detected faster. For a compliant taxpayer, the right response should not be to fear enforcement, but to be ready to demonstrate compliance at all times.

The real challenge of 2027

The package has favorable elements, such as sustained physical investment, the expansion of RESICO and relevant social programs, but also challenges: a still significant deficit, debt close to 55% of GDP, growing pensions, high financial costs and a strong reliance on revenue continuing to rise.

The underlying question is whether Mexico can build a fiscal policy capable of collecting better, spending better and creating conditions for growth. Efficient enforcement must fight evasion and simulation, but also provide certainty to those who invest, produce, create jobs and comply.

The best tax policy should not be measured only by how much it collects, but by its ability to build trust, formality, investment and growth. Mexico needs sufficient public revenue and also strong companies. These two goals are not incompatible.

At Baker Tilly Mexico, we help companies strengthen their tax risk management and prepare for the changes in the 2027 Economic Package.

Article originally published in Forum News, October 2026 issue.