Introduction to the Health Taxes
In accordance with the Miscellaneous Fiscal provisions included in the 2026 Economic Package, the Mexican Secretariat of Finance and Public Credit (SHCP) has announced an update to the amounts collected through the Special Production and Services Tax (IEPS) on tobacco and flavored beverages. These updates are part of a broader initiative to generate additional revenue, which will be directed towards the healthcare sector.
Who is Bertha Gómez Castro?
Bertha Gómez Castro, the Subsecretary of Expenditures at SHCP, clarified that the estimated additional revenue of 41,000 million pesos from these “health taxes” will be allocated as part of the healthcare budget.
IEPS Adjustments on Tobacco and Flavored Beverages
The IEPS on flavored beverages will see a significant increase, rising from 1.6451 pesos per liter to 3.0818 pesos. Meanwhile, the tax on cigarettes will escalate from 160% to 200%, according to the Miscellaneous Fiscal provisions.
Social Implications of the Tax Changes
Édgar Amador Zamora, the Head of Finance, emphasized that these modifications and the introduction of a new IEPS on violent video games are not merely revenue-generating measures but have social objectives.
“This is a humanistic budget, meaning that these taxes go beyond mere figures of income and expenditure. The guidelines for these contributions on harmful goods are dictated by the Health Secretariat, focusing on health strategies and security before revenue generation… The fiscal policy is now supportive of the health policy, which is the logic behind this humanistic budget we are proposing,” explained Amador Zamora.
Increased Healthcare Spending
For the upcoming year, functional health expenditure is projected to reach 965,663 million pesos, an increase of 84,203 million pesos compared to the current year’s approved amount. This increase already incorporates the 41,000 million pesos expected from these health taxes.
Additionally, an 8% IEPS is proposed for violent video games, aiming to collect 183 million pesos.
Dedicated Health Fund
Prior to the Finance Secretary’s conference at Palacio Nacional, President Claudia Sheinbaum announced that the extra revenue from these health taxes will be directed to a specialized health fund.
This fund will focus on addressing health issues related to excessive consumption of sugary drinks and tobacco, she explained.
Key Questions and Answers
- What are the health taxes? The health taxes refer to updates in the Special Production and Services Tax (IEPS) on tobacco and flavored beverages, aiming to generate additional revenue for the healthcare sector.
- Who will benefit from these taxes? The revenue generated from these health taxes will be allocated to the healthcare budget, directly supporting initiatives related to public health.
- What is the purpose of taxing violent video games? The proposed 8% IEPS on violent video games is not primarily a revenue-generating measure but rather a step towards addressing concerns related to content and its impact on society, as deemed by the government.
