Higher taxes on tobacco, alcohol and sodas on the horizon in Mexico

Mexico is advancing a sin tax in the national legislature. Photo: Getty
Mexico is advancing a sin tax in the national legislature. Photo: Getty

Mexico City — The reigning Morena party is spiking the 2020 fiscal package with a sin tax.

Higher taxes on alcohol, tobacco and soda are on the way, said the Budget Commission President Alfonso Ramirez Cuellar.

The Special Tax on Production and Services (IEPS) is also targeting non-essential, high-calorie foods.

The objective is to inhibit the consumption of things that are bad for you. Mexico’s love affair with bad food increases heath care costs overall, he said.

The Morena politician said in a statement that a “tax reorganization without creating new taxes” will be sought, analyzing the tax base while combating tax evasion with increased sanctions for falsifying invoices.

Opposition to the measure would have to come from within. The party is led by President Andres Manual Obrador, and dominates both Mexico’s Senate and Chamber of Deputies.

Ramirez blamed the world economy on Mexico’s poor economic growth, saying it has become necessary to “identify fiscal mechanisms to maintain healthy public finances.”

But he insisted that taxes will not be raised and called on local governments to improve their finances.

“The excessive dependence that states and municipalities have shown regarding federal resources is not sustainable,” said Ramirez. “They must take the necessary measures to increase their own income, modernizing their cadastres and collecting the corresponding taxes. Local authorities need to assume their responsibility and exercise their powers.”

Source: El Universal

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