Mexico’s lower house of Congress has approved a broad health-tax package that nearly doubles the excise on sugary beverages and sharply increases levies on tobacco, energy drinks, gambling, and violent video games. The initiative, promoted by President Claudia Sheinbaum, now moves to the Senate for final approval and is expected to take effect on 1 January 2026.
Under the proposal, the Impuesto Especial sobre Producción y Servicios (IEPS) on sugar-sweetened beverages will rise from 1.645 MXN to 3.082 MXN per liter (about USD 0.09 to 0.17). For drinks marketed as light or zero with artificial sweeteners, a lower rate of 1.5 MXN (USD 0.08) per liter was agreed after negotiations between the government and industry groups, including Coca-Cola. Oral-rehydration solutions meeting World Health Organization composition standards remain exempt.
President Sheinbaum said the measure aims to combat Mexico’s severe obesity and diabetes crisis. Mexicans consume an average of 166 liters of soda per year, one of the world’s highest levels, contributing to more than 100,000 diabetes-related deaths annually. The Ministry of Finance expects the higher rates to cut soda consumption by roughly 7 % in the first two years and generate about 41 billion MXN (USD 2 billion) for public-health programs.
The tax reform also raises IEPS rates on tobacco products from 160 % to 200 % ad valorem and extends duties to new nicotine products such as pouches. Additional levies will target gambling—both in-person and online—and violent video games. Alcoholic beverages, including beer, were discussed but are not included in the 2026 budget, though officials confirmed the topic remains “on the agenda.”
Opposition lawmakers such as Mario Zamora and Patricia Flores (PRI) denounced the reform as a blow to small retailers. “They are taxing everyday products that ordinary people buy,” Zamora argued, calling instead for “fiscal justice” focused on large manufacturers. Despite criticism, Sheinbaum insisted the goal is health, not revenue: “I hope we don’t collect a single peso from soft drinks—because that would mean people stopped drinking them.”
