Hacienda Reduces Fuel Taxes by Up to 2 Pesos

During the week of January 18 to 24, the Ministry of Finance and Public Credit (SHCP) will apply discounts to the rates of the Special Tax on Production and Services (IEPS) for Magna gasoline and diesel, offering 1.37 pesos and 1.90 pesos per liter, respectively. According to the agency, the support for the IEPS on regular gasoline is 21.31% and for diesel it is 26.84%. On the other hand, there will be no discount on the IEPS rate for Premium gasoline. Last week, the incentive for Magna gasoline was 14.40% and 12.92% for diesel, while Premium did not receive any tax relief.

As a result, the rates are set at 5.07 pesos per liter for Magna gasoline, 5.45 pesos for Premium, and 5.19 pesos for diesel.

Why is this subsidy implemented? The federal government, through the Ministry of Finance, decides to implement the subsidies for gasoline and diesel to mitigate the increases in international oil prices and other energy sources. As the discounts become larger, this will impact tax collection at the federal level. How much does a liter of gasoline cost? As of January 17, the national average price for a liter of Magna is 24.31 pesos, while Premium is at 25.63 pesos, and diesel averages 26.07 pesos per liter.

It’s interesting to see how subsidies can affect both consumers and tax revenue. Although these tax reductions help ease the burden faced by citizens due to rising prices, it’s important to consider the long-term implications for public finances. An adequate balance is vital to ensure that the government can continue to fund essential services without compromising its economic stability.