Mexico has room to boost tax revenues without fiscal overhaul, president says

MEXICO CITY (Reuters) – Mexico has room to boost tax revenues next year without turning to a deep fiscal reform, President Claudia Sheinbaum said on Friday, as her government is expected to present its budget proposal later in the day.

Sheinbaum said that her government could roll out strategies to shore up revenues obtained by tax agency SAT and through customs.

“If additional reforms are necessary, we’ll work on it through next year,” Sheinbaum said, adding that “there are still many opportunities to boost revenues without needing a deep fiscal reform.”

The comments from Sheinbaum, who entered office at the beginning of October, come a day after Moody’s (NYSE:MCO) Ratings downgraded its outlook on Mexico to negative from stable.

The ratings agency pointed to institutional and policy weakening that risks undermining the economy as well as government accounts, which Sheinbaum brushed off when asked about on Friday.

Sheinbaum inherited Mexico’s largest budget deficit since the 1980s and analysts have questioned how she can fulfill campaign pledges to increase welfare and the minimum wage while also taming the deficit.

The president, as well as her finance minister, have agreed that the budget for next year should contain a sizeable deficit reduction.