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Healthy Revenues From Mexican Junk Food Tax

by Mike Godfrey, Tax-News.com, Washington

26 May 2014


Mexico's new levies on junk food and soft drinks have generated significant revenues for the government since their introduction at the beginning of this year, according to a report from the Secretariat of Finance and Public Credit (SHCP).

The taxes, which apply to high-calorie drinks and food, contributed 20 percent of the total revenue for the Special Tax on Production and Services (IEPS) in the first quarter of this year, the SHCP said, despite concerns that the introduction of an additional tax might fuel grey market sales.

The proceeds from the IEPS amounted to MXN22.4bn (USD1.74bn) in the first three months of this year. Of that amount, MXN2.36bn came from high-calorie foods, MXN2.32bn came from flavored drinks, and MXN6.3m came from energy drinks.

However, tobacco is still the biggest contributor to the IEPS, accounting for MXN10.8bn of revenue in the first quarter. Meanwhile, alcohol and gambling accounted for MXN3.18bn and MXN566m, respectively.

TAGS: Finance | tax | energy | Mexico | food | gambling | Tax

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