Mexico's Sugary Drinks Tax Working, Report Says

by Mike Godfrey, Tax-News.com, Washington

12 January 2016

Mexico's tax on sugary drinks reduced consumption by six percent in 2014, according to a report published in the BMJ medical journal.

On January 1, 2014, Mexico started levying an excise tax on sugar sweetened beverages at a rate of one peso (USD0.06) per liter. According to the report, this tax is entirely passed on to consumers at the point of sale.

The study showed that, by December 2014, the tax had had a more dramatic impact, in reducing consumption by 12 percent. It also said that the reduction in consumption was greatest among the households of the lowest socioeconomic status.

Mexico has one of the highest prevalence rates for diabetes and obesity in the world, the study pointed out. The sugary drinks tax was designed to bring these rates down.

A proposal to halve the tax was approved by the Finance Committee of Mexico's Chamber of Deputies on October 17, 2015.

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