Mexico: 16 tax reform proposals aimed at boosting health budget

The Alianza por la Justicia Fiscal (AJF) and the Instituto del Sur Urbano (SUR) have proposed 16 reforms to the collection and expenditure of health taxes in Mexico. These taxes target harmful products such as tobacco, alcohol, and sugary drinks, with the goal of increasing the national health budget.

Proponents argue that current tax revenues are insufficient to cover the health consequences of these products. For instance, smoking causes over 63,200 deaths annually in Mexico, costing the state 152 billion pesos in direct medical expenses and over 93 billion pesos in indirect costs like lost productivity. In 2025, tobacco tax revenue reached only 50 billion pesos, meaning for every peso collected, 4.90 pesos are lost in related costs.

The proposal suggests that if 70 percent of the non-participating portion of healthy IEPS tax revenue were earmarked for these purposes, it would provide 152.6 billion pesos to strengthen the public health system and address social and economic factors contributing to related diseases.