coca-cola Soft drinks will generate more tax revenue.

Soft drink, snack tax to boost revenues

Finance Secretariat forecasts an increase of 130% next year

A proposed tax hike on high-calorie food and drink products would raise billions of pesos in extra revenue – but critics say it unfairly targets the poor.

ADVERTISEMENT

The increase in the Special Tax on Products and Services (IEPS), presented to Congress in the budget package last week, is predicted to boost revenues from the tax by 130%, said Leobardo Brisuela Arce, president of the Mexican Institute of Public Accountants (IMCP).

According to the Finance Secretariat, the augmented IEPS would raise an estimated 363 billion pesos in 2016, up from 159 billion this year.

“This is a very important figure because we are predicting a 250-billion-peso decrease in income tax revenue while IVA [the value-added tax] is predicted to grow by just 30 billion pesos next year,” said the IMCP head.

The IEPS currently applies to certain fuel products as well as tobacco, alcoholic beverages and food and soft drinks with a high calorie content, such as snacks and soft drinks.

The head of the Business Coordination Council (CCE), a business advocacy group, said it is hoped that the new tax will target food and drink products with a high calorie content. The point is for the tax to reduce the calorie index, which it is not currently doing, said Gerardo Gutiérrez Candiani, adding that the government must introduce measures to encourage industry to reduce the fat content of food products.

ADVERTISEMENT

“This is not about having an impact on public finances, it’s about seeing if we can have a favorable impact on industry and consumers,” he stressed. “These are the kinds of policies that we are looking for.”

Candiani plans to make a counterproposal to the proposed 2016 budget.

Meanwhile, the president of the Confederation of Industrial Chambers, Manuel Herrera, said the proposed tax increase would be unfairly prejudiced against the poorest members of society, who are more likely to consume high-calorie food and drink products. He, too, felt that the existing tax had not succeeded in reducing calorie intake among consumers.

Source: Milenio (sp)

Stories from our archives that you might enjoy

  • robert w

    How would it hurt the poor if it gave them a chance for a healthier and longer life. Taxes on alcohol have had an impact. Taxing soft drinks may get mothers to hand their kids more water and less sugar.

  • billhoodconsulting

    Personally, I see nothing wrong with taxing, even excessively, items that can create health problems that “all taxpayers” must absorb. Those that want to destroy their health should pay for the consequences of their own behavior – not those who choose to live a health conscious lifestyle.

  • Lloyd Le Blanc

    Why centre out the poor ? Again ! Poverty is often associated with a lack of intelligence.Not so and consuming high sugar drinks is a quick, cheap calorie fix that quickly turns to fat in the body.Who should be taxed are the global manufacturers of this terrible drinking plague.Look at the US and the volume of sugared drinks consumed and that translates to, along with Mexico, some of the highest rates of obesity in the world.I would suggest that the Mexican diet also does not have the high rate of sugar consumption in their food.However there probably is a much higher rate of sugared drinks consumed.I have never before seen 3 litre bottles of soda? They are huge !.
    Also it is not just sugar,what about the additives,colourants and who knows what else is added.
    Take some of that revenue and put out an intensive education campaign with regards to all of the effects of consuming these products.Take carbonated water add a small amount of juice (jamaica) and enjoy on your way to becoming healthier.

  • Pat

    Some of the tax revenue could be used to give more subsidies to the milk producers. Milk is more expensive than soda so soda is what kids get for breakfast, along with a bag of chips.

    • Pete L.

      I agree with you 100% Pat. Let’s hope some enlightened bureaucrats find a way to make this happen (milk subsidies).

FreeCurrencyRates.com
ADVERTISEMENT