Mexico has been among the forerunners in tax digitalization, starting in the 1980s when it piloted digital Point of Sale (PoS) registration and invoicing. Today, Mexico has one of the most advanced digital tax administration systems among the world’s emerging economies. Through sound strategic decision making, far-sighted reform with robust implementation, and ongoing investment, Mexico has delivered impressive results. Key achievements are highlighted in this report, along with key lessons from Mexico’s tax digitalization journey that could inform other countries’ reform efforts.
Impact / Outcome
From 2010 to 2016, Mexico increased its overall tax revenue and social security contributions by about 95%, to MXN 3.3 trillion/USD 139.44 billion. Mexico’s tax-to-GDP ratio rose from 12.6% to 16.2% between 2012 and 2017, driven largely by a 48% increase in revenue from tax on goods and services after e-invoicing was made mandatory in 2014. Between 2012 and 2016, total tax evasion fell from 35.7% to 16.1% as a result of changes in the tax structure for income tax, VAT, and Mexico’s production and services tax. Total tax evasion in 2016 represented 2.8% of GDP or one-sixth of all non-oil-related government revenue. Revenue generated by audits increased by 117% over the last five years. Increases in the tax base, which has grown by around 150% since 2010, are also linked to digitalization and have contributed to increased tax revenues.
Funding sources
Public
Key Metrics
Reduced administrative delays and improved efficiency through tax digitalization
Operating model
Public-private partnershipYear published
06 October 2020 
Better Than Cash Alliance NGOs and other non-profit