In 2025, Mexico is implementing tax increases on cigarettes and soft drinks as part of a broader “healthy tax” initiative aimed at curbing harmful consumption and boosting public revenue. These changes affect the Special Tax on Production and Services (IEPS), which applies to products considered detrimental to public health.
For cigarettes, the IEPS will rise from MXN 0.6166 to MXN 0.6445 per cigarette. This means a standard pack of 20 cigarettes will increase from MXN 12.33 to MXN 12.89—a 4.3% hike. However, the government has also proposed a more aggressive plan to raise tobacco taxes by 200% through 2030, including new per-cigarette quotas, VAT adjustments, and higher duties on hand-rolled cigars and nicotine products.
Soft drinks and flavored beverages will also see a notable increase. The IEPS per liter will go from MXN 1.5737 to MXN 1.6451 in 2025. By 2026, this tax is expected to jump to MXN 3.08 per liter, potentially raising consumer prices by 10–15% depending on the brand and region. Industry experts warn that this could impact over 400,000 small businesses and threaten up to 150,000 jobs in the beverage sector.
While the government argues these measures promote healthier lifestyles and help fund treatment for sugar-related illnesses, critics say they disproportionately affect low-income households and small retailers. The tax hikes are part of President Claudia Sheinbaum’s broader public health and fiscal reform agenda.
Sources: tobaccoreporter.com / pesomxn.com
