Product Categories Affected by IEPS Taxes
Starting in 2026, consumers can expect price increases for soft drinks, serums, cigarettes, and potentially premium gasoline due to adjustments in the Impuesto Especial sobre Producción y Servicios (IEPS) tax rate. This comes alongside the traditional annual price hikes by retailers and increased tariffs for public services as a result of inflation.
IEPS and Its Impact on Consumer Prices
While the increase in the IEPS tax rate for fuels might lead to higher prices, it’s not a guaranteed outcome. Factors such as government tax incentives, exchange rates, logistical issues, and international oil prices play a significant role in determining the final consumer cost.
Currently, regular gasoline is capped (through a voluntary agreement between the government and private sector) at 24 pesos per liter. Hacienda has assured that regular gasoline prices will not increase due to the IEPS adjustment. However, premium gasoline lacks such a cap, making price hikes possible in 2026.
Anticipated Inflation Rates in 2026
Amidst these developments, Banxico (the Bank of Mexico) has revised its inflation expectations for the first half of the following year.
In its latest monetary policy report for 2025, Banxico adjusted its projections for the National Index of Consumer Prices (INPC), which measures inflation in Mexico.
- General Inflation: Banxico raised its estimate from 3.5% to 3.7% for the first quarter and from 3.2% to 3.3% for the second quarter.
- Subjacent Inflation: The projection increased from 3.8% to 4% for the first three months and from 3.3% to 3.4% for April-June.
Banxico acknowledges that the impact of fiscal adjustments will be temporary and not necessarily proportional to price changes. The central bank will continue to evaluate updating the inflation forecast as more information becomes available.
Key Questions and Answers
- Will the IEPS tax rate increase lead to higher prices for all affected products? Not necessarily. Various factors, including government tax incentives and international oil prices, will influence final consumer costs.
- Which gasoline types are likely to see price hikes? Premium gasoline, as it does not have a price cap agreed upon by the government and private sector.
- What are Banxico’s revised inflation expectations for 2026? Banxico increased its general inflation projection to 3.7% for the first quarter and 3.3% for the second quarter. The subjacent inflation projection rose to 4% for the first three months and 3.4% for April-June.
Source: [email protected]
