Mexico is among the countries in Latin America and the Caribbean (LAC) that have seen a reduction in hydrocarbon tax revenues due to tax exemptions granted to Pemex, according to a report prepared by the Inter-American Center of Tax Administrations (CIAT).
The document, which also involved the Economic Commission for Latin America and the Caribbean (ECLAC) and the Centre for Tax Policy and Administration of the Organisation for Economic Co-operation and Development (OECD), outlines the federal support measures provided to the state-owned oil company. These include tax breaks on certain payments related to the Shared Profit Tax and the Hydrocarbon Extraction Tax.
The measure will impact revenues recorded during 2025, the statistical analysis indicates. The Inter-American Development Bank (IDB) also contributed to the analysis, with financial support from the Spanish Agency for International Development Cooperation (AECID), as well as the governments of Canada, Ireland, Japan, Luxembourg, Norway, the Netherlands, Sweden, and Switzerland.
The report highlights that tax revenues from oil and gas exploration and production fell significantly in Latin America and the Caribbean (LAC) in 2024.
Total revenues, derived from both tax and non-tax instruments, decreased by 22% in nominal terms, falling from US$90.7 billion in 2023 to US$71.1 billion in 2024.
It emphasizes that, while the decline was widespread, the result was driven in absolute terms by losses in Brazil, Colombia, and Mexico.
Guyana was a notable exception, with a strong increase in revenues driven by higher production and export volumes, the report notes.
In relative terms, average total revenues fell from 4.1% of GDP in 2023 to 3.1% in 2024, with equivalent reductions in both tax and non-tax revenues.
The report explains that the average was heavily influenced by Trinidad and Tobago, given the importance of the hydrocarbon sector to its economy. However, excluding Trinidad and Tobago, the average revenue decreased more modestly, from 3% to 2.8% of GDP.
Colombia is also included, but its revenue decreased due to a Constitutional Court ruling in November 2023 that established that royalty payments for oil and natural gas were tax-deductible.
Source: eluniversal
