Mexico's sweeping tax hikes target soda, gambling and violent video games

SAN DIEGO (Border Report) - Many Mexican congressional representatives drank sodas and energy drinks while voting to increase taxes on these drinks and other products such as cigarettes, beer, online gaming and violent video games.

Mexico President Claudia Sheinbaum has said the higher taxes will help decrease the rates of obesity and diabetes in her country by discouraging the consumption of sugar-laden drinks.

The new tax on beverages will go up on average from about 1.64 pesos to 3.08 per liter.

A late lobbying push by soda manufactures cut the tax on sugar-free and diet drinks to 1.5 pesos per liter.

Sheinbaum and proponents have said it was also time to also revamp the Products and Services tax code.

There was heavy congressional opposition to the increase, some deputies saying the move will 'only hurt mom-and-pop stores that will see fewer sales.'

"Today they raise the taxes for products we all consume daily like sodas, beer, cigarettes, energy drinks, and as a result, you pay more and the government will spend more," said Mario Zamora, a PRI party representative.

"We don't agree with this deal to create more taxes, we want fiscal justice, we should be charging the big manufacturers and not the people on the street," said Patricia Flores, another congressional opponent of the tax increase.

Soda makers such as Coca-Cola have said they will no longer make their 3-liter bottles available to consumers in Mexico.

As for lottery and bets made in person, taxes will go up by 30 to 50 percent, while online betting tax fees will increase by 50 percent.

Video games that are violent or made for adults will see an increase of 8 percent in taxes.

With congressional consent, the Mexican Senate will now take up the matter.

If approved, the new taxes will take effect in 2026.

President Sheinbaum has said the money generated from the increased taxes will help fund children's health and educational programs.

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