The Role of the Public Sector in the National Transfer Accounts of Mexico Iván Mejía Guevara Mtro. Félix Vélez Fernández Varela IDRC-ECLAC PROJECT NATIONAL POPULATION COUNCIL-MEXICO (CONAPO) Sixth Annual National Transfer Accounts Workshop, January 9-10, Berkeley, California
Outline
I. Public Transfer Outflows II. Oil Revenues III. NTA Estimates
I. Public Transfer Outflows
Contribution for the Payment of Income Tax (ISR) by Income Deciles, Mexico 2004 ISR Contribution
ISR Incidence
80.0
20.0
70.0
15.0
60.0 10.0 50.0 5.0 %
%
40.0 30.0
0.0 I
II
III
IV
V
VI
VII
20.0 -5.0 10.0 -10.0
0.0 I
II
III
IV
V
VI
VII
-10.0
VIII
IX
X -15.0
Households
Population
Households
Population
VIII
IX
X
Contribution for the Payment of SSC by Income Deciles, Mexico 2004 SS Contribution
SS Incidence
50.0
1.6
45.0 1.5 40.0 1.4
35.0
1.3
25.0
%
%
30.0
1.2
20.0 15.0
1.1
10.0 1.0 5.0
0.0
0.9 I
II
III
IV
Households
V
VI
VII
Population
VIII
IX
X
I
II
III
IV
Households
V
VI
VII
Population
VIII
IX
X
Macroeconomic Control for Income Tax by Income Deciles, Mexico 2004 Income decil
Contribution Macro control s to ISR (%) (billion Mexican pesos)
I
-0.1
(232.3)
II
-0.6
(1,394.1)
III
0
-
IV
0.4
929.4
V
0.4
929.4
VI
1.9
4,414.6
VII
4.1
9,526.3
VIII
9.3
21,608.4
IX
20.1
46,702.0
X
64.6
150,097.0
100.0
232,348.3
Total
8,000
Age Profiles of Income Tax by Income Deciles, Mexico 2004
7,000
6,000
Mexican Pesos
5,000
4,000
3,000
2,000
1,000
0 1
6
11
16
21
26
31
36
41
46
51
56
61
66
-1,000 decile I decile V decile IX
decile II decile VI decile X
decile III decile VII Total
decile IV decile VIII
71
76
81
86
91
Age Profiles of Income Tax*, Mexico 2004 0.1
0.1
Relative to YL (30-49)
0.1
0.1
0.0
0.0
0.0 0
5
10
15
20
25
30
35
40
0.0
45
50
55
60
65
Age
Proportional to Labor Income
By Population Deciles
* Includes fiscal subsidies to low income deciles’ population.
70
75
80
85
90+
Effects of Fiscal Subsidies on the Allocation of ISR, Mexico 2004 0.1
0.1
0.1
Axis Title
0.1
0.0
0.0
0.0
0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
80
85
0.0
Proportional to Labor Income
By Pop Dec (fiscal subs)
By Population Deciles (No Fiscal Subs)
90+
0.1
Age Profile of Social Security Contributions*, Mexico 2004
0.1
0.1
Relative to YL (30-49)
0.1
0.0
0.0
0.0
0.0
0.0 0
5
10
15
20
25
30
35
40
45
50
55
60
65
Age
Proportional to Labor Income
* Includes fiscal subsidies to low income deciles’ population.
By Income Deciles
70
75
80
85
90+
Effects of Fiscal Subsidies on the Allocation of SSC, Mexico 2004 0.1
0.1
Relative to YL (30-49)
0.1
0.1
0.0
0.0
0.0
0.0
0.0 0
5
10
15
20
25
Proportional to Labor Income
30
35
40
45
50
By Pop Dec (Fiscal Subs)
55
60
65
70
75
80
By Pop Dec (No fiscal subs)
85
90+
General Tax Profile, Mexico 2004 0.4
0.4
Relative to YL (30-49)
0.3
0.3
0.2
0.2
0.1
0.1
0.0 0
5
10
15
20
25
30
35
40
45
50
55
60
Age
Original Approach
By Population Deciles
65
70
75
80
85
90+
II. Oil Revenues
Public Outflows, Mexico 2004 55,000
45,000
Mexican Pesos
35,000
25,000
15,000
5,000
-5,000
0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
80
Age Indirect taxes
Direct taxes
Other taxes
SSC
Oil revenues
Total
85
90+
Public Transfers Outflows: Treatment of Oil Revenues Transfer Outflows TOTAL Taxes on production and imports [1] Taxes on products Value added type taxes (VAT) Taxes and duties on imports excluding VAT Export Taxes Taxes on products except VAT, import and export taxes Monopoly revenues and excise (tobacco and alcohol) Excise tax (Gasoline) Taxes on financial transactions Other Other taxes on production Subsidies [1] Current taxes on income, wealth, etc. [2] Taxes on income Individual income tax Corporate income tax Other current taxes Social contributions [2,3] Employers' actual social contributions Imputed social contributions Other current transfer outflows [2]
UN SNA SNA – PEMEX Labor Income Asset Income Consumption -1,509,858 -1,138,128 -572,264 -191,821 -373,306 -819,276 -447,545 -22,765 -18,696 -406,085 -406,085 0 0 -406,085 -777,816 -291,147 0 0 -291,147 -291,147 -29,693 -29,693 0 0 -29,693 0 0 0 0 -110,711 -346,264 -85,245 0 0 -85,245 -31,911 -31,911 -31,911 0 0 0 0 -53,335 -53,335 -53,335 0 0 0 0 0 0 -261,019 -41,460 -22,765 -18,696 0 -41,460 32,778 0 0 32,778 32,778 -405,474 -368,013 -194,888 -173,126 -37,461 -175,415
-405,474 -368,013 -194,888 -173,126 -37,461 -175,415
-232,348 -194,888 -194,888 0 -37,461 -175,415
-173,126 -173,126 0 -173,126 0 0
0 0 0 0 0 0
-153,351 -22,065 -142,471
-153,351 -22,065 -142,471
-153,351 -22,065 -141,735
0 0 0
0 0 0
Rest of the World -736
-736
Taxes and Royalties of PEMEX 1.
Royalties a) b) c)
2. 3. 4. 5.
Tax to the extraction: 52.3% over cash flow resulting from the difference between oil sells and extraction costs Extraordinary: 25.5% (same base) Additional: 1.1% (same base)
Tax to oil revenues: Equivalent to ISR for corporations (35%) Excise tax [Gasoline and diesel (IEPS)] Value Added tax (VAT) Excise Tax (IEPS): rates depend on: product, producer prices, geographical selling
NOTE: Total Taxes and Royalties: 60% of total sells to others.
PEMEX Operating Surplus and Net Loss 900 800 700 600 500 400
300 200 100 0 -100
Total income Total Operation Financial costs Operating Rights (oil Extra revenues Excise tax (IEPS) costs Surplus -before extraction) and taxes and others royalties
Other
Net loss
Reallocation of Oil Revenues: Public Property Income, Mexico 2004 Public Asset Income Asset Income (total) Operating surplus, net Property income, net Property inflows Property outflows Interest, net Inflows Outflows Distributed income of corporations, net Inflows Outflows Reinvested earnings on DFI, net Inflows Outflows Property income to insurance policyholders Inflows Outflows Rent, Net Inflows Outflows
UN SNA
SNA + PEMEX -64,032 0 -64,032 123,623 -187,656 -145,294 42,355 -187,649
307,698 0 307,698 495,354 -187,656 -145,294 42,355 -187,649
71,086 71,086 0 0 0 0
71,086 71,086 0 0 0 0
320 320 0 9,856 9,863 -7
320 320 0 381,586 381,594 -7
Reallocation of Oil Revenues: Private Property Income, Mexico 2004 Private Asset Income
UN SNA
Asset Income (total) Capital income, net Other taxes less subsidies on production Property income, net Property inflows Property outflows Interest, net Inflows Outflows
3,101,616 3,173,129 390,426 -71,513 2,212,109 -2,283,622 41,209 467,430 -426,221
SNA + PEMEX 2,358,155 2,801,399 18,696 -443,244 2,212,109 -2,655,353 41,209 467,430 -426,221
Distributed income of corporations, net Inflows Outflows Reinvested earnings on DFI, net Inflows Outflows
-91,793 1,686,806 -1,778,598 -10,754 14,782 -25,536
-91,793 1,686,806 -1,778,598 -10,754 14,782 -25,536
-320 15,343 -15,663 -9,856 27,748 -37,603
-320 15,343 -15,663 -381,586 27,748 -409,334
Property income to insurance policyholders Inflows Outflows Rent, Net Inflows Outflows
Transfers Surplus(+)/Deficit(-) Structure of Public Flow Account
SNA
SNA - PEMEX
Public Transfers Net Public Transfers Public Transfer Inflows
0
0
1,237,652
1,237,652
In-kind Transfer Inflows
913,971
913,971
Cash Transfer Inflows
323,681
323,681
Public Transfer Outflows Taxes and Grants Transfers Surplus(+)/Deficit(-) Public Asset-based Flows Public Asset-based Reallocations Asset Income, net Less: Public Saving
-1,237,652
-1,237,652
-1,509,858
-1,138,128
272,206
-99,525
-272,206
99,525
-64,032 208,174
307,698 208,174
Public Outflows (withou Oil Revenues), Mexico 2004 50,000 45,000 40,000 35,000
Mexican Pesos
30,000 25,000 20,000 15,000 10,000
5,000 0 0
5
10
15
20
25
30
35
40
45
50
55
60
65
Age
Indirect Taxes
Direct Taxes
Other
SSC
Total
70
75
80
85
90+
III. NTA Estimates
Life Cycle Deficit: Treatment of Oil Revenues Mexico 2004 90,000
70,000
Mexican Pesos
50,000
30,000
10,000
0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
80
85
-10,000
Age -30,000 YL*
C*
DCV*
YL
C
LCD
* Treatment of oil revenues as indirect taxes and their functional classification as YL and asset income.
90+
LCD vs. Net Transfers 60,000
40,000
Mexican Pesos
20,000
0 0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
80
85
-20,000
-40,000
LCD Net Private Transfers Net Public Transfers -60,000
Age
90+
Public Asset-based Reallocations (Aggregate), Mexico 2004 10,000
9,000
8,000
Million Mexican Pesos
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0 1
6
11
16
21
26
31
36
Asset-based Reallocations
41
46
51
56
Asset Income
61
66
Saving
71
76
81
86
91
Private Asset-based Reallocations (Aggregate), Mexico 2004 80,000
70,000
60,000
Million Mexican Pesos
50,000
40,000
30,000
20,000
10,000
0 0
5
10
15
20
25
30
35
40
45
50
55
60
65
-10,000
-20,000
Asset-based reallocations
Asset Income
Saving
70
75
80
85
90+
Per Capita LCD, Net Transfers and Asset BasedReallocations, Mexico 2004 80,000 60,000 40,000
Mexican Pesos
20,000 0 1
6
11
16
21
26
31
36
41
46
51
56
61
66
71
76
81
86
-20,000 -40,000 LCD
Net Transfers
-60,000
Asset-Based Reallocations -80,000
Age
91
Support of LCD for 65+
Assets Mexico 2004
1/3 2/3 Thailand 1996 US 2000 2/3 1/3
Costa Rica 2004
Taiwan 1998 Japan 1999
Family Transfers
0 2/3
1/3
Public Transfer
Future Work
1. Complete NTA estimates: 2000, 2002, 2005 and 2006 2. Generational Accounts 2004 3. Article for IDRC-ECLAC Project
