Moody's rules out changes to Mexico's risk rating

The agency estimates that the recently approved tax reform does not change the fundamental situation.

The international risk rating agency Moody's ruled out changing Mexico's rating, currently Baa1, the eighth on a scale of ten, because it considers that the approved tax reform does not increase the country's revenue-collecting capacity.
At the firm's second annual conference of financial institutions in Mexico, Moody's Sovereign Risk Director - who assesses government debt - Mauro Leos said that "the bad news is that nothing will happen with this country's rating."
Although the tax reform approved by the Mexican Congress this month can be considered "an important and almost historic event," he maintained that its results do not change the fundamental situation "nor are they a cause for celebration."
The package of tax changes includes the creation of a Single Rate Business Tax (IETU) of 16,5% that will gradually increase to 17,5%, another of 2% on cash deposits exceeding 25.000 pesos (about 2.270 dollars) and another of 5,5% on gasoline, as well as a new tax regime for the state-owned company Petróleos Mexicanos (Pemex).
It also establishes a special provision to tax the sale of publicly traded companies and a new 20% tax on games and raffles.
Leos said that, at most, the reform can be described as "modest" because the forecast is to raise tax revenues by 2,1 percentage points, a figure that will barely offset the expected drop in oil revenues.
The financial expert noted that Mexico has a "very low" tax collection rate, at just 10% of GDP, a figure comparable to that of Central American countries, which have a lower rating.

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Moody's rules out changes to Mexico's risk rating

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Other news of interest

The new European packaging regulations redefine the concept of 'producer' and require companies to review their obligations

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Óscar Puente oversees the final stages of construction on the new intermodal station in Almería, a key infrastructure project for high-speed rail.

Any questions about this news?

International business service providers

Moldtrans

FedEx Express

AROLA

Pantoja Logistics Group

DHL Express

Other news of interest

The new European packaging regulations redefine the concept of 'producer' and require companies to review their obligations

Maersk raises its profit forecast and exposes structural strain on supply chains

Óscar Puente oversees the final stages of construction on the new intermodal station in Almería, a key infrastructure project for high-speed rail.

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