This is how the remittance tax would impact the Mexican economy.

MEXICO CITY (El Universal).— Secretary of Finance and Public Credit Edgar Amador said that the possible approval of a 3.5% tax on remittances by the United States government would have an impact equivalent to 3% of GDP, but with a neutral effect on public finances.

"The magnitude of the impact could be equivalent to 3% of GDP in rough terms, but the regional impact could be very significant. In some states, for example, it represents 20% of the income of some families; in some states, it's equivalent to 10% of GDP," he explained.

The official commented that this is an unfair and discriminatory tax that likely violates the double taxation agreement between Mexico and the United States. Therefore, it is hoped that the Mexican government's position will be heard in the United States Senate.

“It is a significant impact, and hopefully the calls to reconsider and scrap this tax will be heeded. There is evidence that when the peso appreciates, our countrymen send more dollars, because they likely have a fixed commitment in pesos to their families. So, what could likely happen is that they will send additional dollars, which would reduce disposable income for consumers in the United States, and the impact would end up being borne by the U.S. domestic market,” he said.

Pending payments

On the other hand, Amador added that to date, 147 billion pesos have been allocated in outstanding payments to Pemex suppliers; however, he is aware of the oil company's commitment to fulfilling its obligations.

"Of course, we are aware that there is still an outstanding balance. We are working in a highly coordinated manner with the CEO, the Ministry of Energy, and the teams to seek financing options. The company's access to banking markets is very open and solid, and we are exploring, let's say, the options to address these issues," he explained.