In 2024, the Tax Administration Service (SAT) has seen historic levels of revenue from audits of large taxpayers. This surge can largely be attributed to the government’s pressing need for increased income to address the significant fiscal deficit projected by the current federal administration.
From January to June of this year, the tax authority collected 378.173 billion pesos through audits of large taxpayers. This amount surpasses the total collected in any previous year, according to SAT data. For comparison, in 2023, the SAT raised a total of 258.846 billion pesos through audits of these taxpayers; in 2020, during the previous record year, collections amounted to 261.451 billion pesos.
Roberto ColÃn, a member of the Fiscal Technical Commission of the College of Public Accountants of Mexico, explained, "In 2024, the country is facing a high fiscal deficit in public finances, meaning the government requires increased revenue to cover all expenses and meet its financial obligations." This situation has prompted the SAT to intensify audits of large taxpayers this year, a trend that may continue into the next year—the first of Claudia Sheinbaum’s term—as the new administration will inherit pressured public finances.
The Ministry of Finance and Public Credit (SHCP) anticipates that the fiscal deficit in 2024, measured through the Public Sector Financial Requisites, will reach 5.9% of GDP, the highest level since 2000, as stated in the Preliminary General Economic Policy Criteria for 2025. For the following year, the goal is to reduce the fiscal deficit to 3% of GDP, which would require significant cuts to net spending.
Beyond the specific situation of public finances in 2024, it is evident that the current government has undertaken an extensive auditing strategy targeting large taxpayers—those individuals or companies whose income exceeds 1.25 billion pesos annually.
From the start of this administration, the focus has been on auditing large taxpayers and collecting tax debts from previous years, as ColÃn noted.
He pointed out that the increased revenues collected in 2024 from audits of large taxpayers can also be attributed to the improving efficiency of the tax authority over the years. Better planning has led to shorter time frames for audits, minimizing the likelihood that reviews will end in lengthy litigation.
"This is an effective strategy, yielding significant tax revenues for the government," ColÃn stated. "We can expect this course of action to continue in the upcoming government term."
However, Juvenal Lobato, a tax law professor at the National Autonomous University of Mexico (UNAM), cautioned that this strategy may face limitations under the next administration. At some point, the available past tax debts to collect will diminish, and the pool of large taxpayers available for audits will shrink.
According to SAT figures, there are 14,988 large taxpayers in Mexico, representing only 0.2% of all taxpayers. Despite their small number, these nearly 15,000 individuals and entities contribute over half of the taxes collected in the country.
Last week, President López Obrador revealed that there are 13 large taxpayers with tax debts totaling 130 billion pesos. These cases have been embroiled in litigation in the courts for months. Among the companies with outstanding debts—whose identities have not been disclosed—are firms from the air transportation, food, soft drink, oil, gas station, cement, and even scrap metal sectors, as well as a football team.
In discussing what an audit entails, Lobato explained that audits are a constitutional authority granted to tax officials in Mexico. One of their fundamental characteristics is their discretionary nature, allowing them to be conducted at any time and on any taxpayer.
The SAT has a Planning area dedicated to identifying anomalies or suspicious operations, and audits are typically initiated based on findings from this department. In the Federal Tax Code, more than ten types of audits are outlined, although four types are most common:
- Home visit: The most intrusive audit, where officials visit the taxpayer’s residence to gather information.
- Cabinet review: Conducted with information already possessed by the authority, such as declarations and bank deposits.
- Docket review: Involves inspecting the financial statements audited by certain companies.
- Electronic review: The SAT detects anomalies through the vast electronic information available and then notifies the taxpayer.
For further inquiries or information, you can contact Sebastian Diaz at [email protected].
Image and News Source: https://es-us.finanzas.yahoo.com/noticias/rompe-r%C3%A9cord-hist%C3%B3rico-recaudaci%C3%B3n-auditor%C3%ADas-220400632.html
