Overview of Proposed Tax Measures
The Secretariat of Finance has included a series of tax measures in the 2026 Economic Package with the aim of discouraging consumption of products deemed harmful to physical and mental health. Among these measures are new taxes on violent video games and online betting services, as well as increased taxes on flavored beverages and tobacco.
Key Tax Increases
- Violent Video Games: A special 8% tax will be imposed on digital services of violent video games.
- Online Gambling: The tax rate for online betting services will rise from 30% to 50%.
- Sugary Drinks: The Impuesto Especial sobre Producción y Servicios (IEPS) on flavored beverages will increase to 3.08 pesos per liter, affecting even those products using non-caloric sweeteners.
- Cigarettes:
- The ad valorem rate for rolled tobacco will rise from 160% to 200%
- A gradual increase in the specific quota will be implemented until 2030
- A transition period between 2026 and 2029 will be established
- New nicotine-containing products, known as “nicotine pouches,” will be incorporated into the tax scheme
Rationale Behind the Tax Measures
The proposed tax increases aim to address high social and economic costs associated with consumption of these industries. These costs include obesity, diabetes linked to sugary drinks, and issues of isolation and anxiety related to intensive video game use.
Who is Affected?
The proposed tax measures will impact various sectors, including:
- Gaming Industry: Developers and publishers of violent video games will face increased costs due to the new 8% tax.
- Online Gambling Operators: Companies offering online betting services will experience a 20% tax rate increase, potentially affecting their profitability.
- Beverage Manufacturers: Producers of flavored beverages will see their tax burden rise, which could lead to higher prices for consumers.
- Tobacco Companies: Rolled tobacco producers will face increased tax rates and a gradual quota rise, potentially impacting their market share and pricing strategies.
Potential Impact on Consumers
Consumers may experience increased prices for the targeted products, which could lead to:
- Reduced consumption of taxed items, such as sugary drinks and violent video games
- Potential shifts in consumer behavior towards less taxed alternatives
- Possible effects on the gaming and beverage industries, with companies adapting to maintain profitability
Key Questions and Answers
- What is the purpose of these tax measures? The proposed tax increases aim to discourage consumption of products that pose significant social and economic costs, such as obesity, diabetes, and mental health issues.
- Which industries are primarily affected by these tax hikes? The gaming industry, online gambling operators, beverage manufacturers, and tobacco companies are the main sectors impacted by these tax measures.
- How will consumers be affected by these changes? Consumers may face higher prices for targeted products, potentially leading to reduced consumption and shifts in purchasing behavior.
- What are the specific tax changes for each industry?
- Violent video games: 8% digital services tax
- Online gambling: 20% tax rate increase
- Sugary drinks: IEPS rises to 3.08 pesos per liter
- Cigarettes: Ad valorem rate increase from 160% to 200%, gradual quota rise, and inclusion of nicotine pouches in the tax scheme
