Mexico tax breaks cost 2.1% of GDP, study finds

A CIEP analysis reveals that just ten exemptions account for 776 billion pesos in lost revenue, with zero VAT on food the largest single item.

By Handelsavisen Newsroom · Automated 2026-07-16 13:11 UTC · 1 min read Last updated: 2026-07-16 13:37 UTC

Mexico’s fiscal landscape faces renewed scrutiny after a new study highlighted the substantial economic cost of its tax exemption framework.

Research by the think tank CIEP indicates that just ten specific tax breaks resulted in revenue losses of approximately 776 billion pesos in 2026, equivalent to 2.1% of the country’s gross domestic product.

The analysis identifies the zero-value-added tax (VAT) on food as the single largest contributor to this fiscal gap.

The analysis identifies the zero-value-added tax (VAT) on food as the single largest contributor to this fiscal gap.

This finding underscores the tension between social policy objectives, such as keeping food prices accessible, and the government’s need to broaden the tax base to fund public services and infrastructure.

The report comes as global markets monitor fiscal developments in emerging economies.

While the study focuses on Mexico, it arrives alongside broader macroeconomic data releases, including anticipation surrounding Malaysia’s second-quarter GDP advance estimate, which has supported the ringgit against the dollar.