Mexico faces real tax revenue declines despite beverage tax hikes

Mexico's federal government has implemented tax increases on flavored beverages, yet real tax revenue is projected to decline. As of January 2026, the Special Tax on Production and Services (IEPS) for flavored drinks rose from 1.65 to 3.08 pesos per liter, alongside a new 1.50 peso per liter levy on drinks containing non-caloric sweeteners. Despite these higher nominal rates, experts from the Centro de Investigación Económica y Presupuestaria (CIEP) suggest that rising prices may reduce consumption, leading to a projected 1% decrease in real revenue for 2027 when adjusted for an estimated 3% inflation.

Simultaneously, the 2027 Economic Package maintained unchanged tax rates for beer, wine, and spirits. The Red de Acción sobre Alcohol (RASA) warned that the current ad valorem system—which taxes beverages based on a percentage of their value rather than alcohol content—has resulted in low prices that facilitate easy access, particularly for adolescents. RASA noted that the government projects an 8.5% real drop in alcohol tax revenue for 2027. The organization has advocated for a reform to tax pure alcohol content to better align fiscal policy with public health goals.