Mexico’s 2026 healthy tax increases on sugary drinks, tobacco, and gambling are producing results within weeks of taking effect: IEPS revenue grew 19% in real terms in January, and the central bank has confirmed the intended price effect. The success elevates the case for extending the same approach to alcohol – the major health-harming product left out of the package so far.

“Health taxes on soft drinks and cigarettes boost IEPS revenue by 19%”

La República reports:

“The implementation of the so-called “health taxes” boosted the collection of the Special Tax on Production and Services (IEPS), which grew 19% in real terms during January 2026, according to data from the federal tax authorities. … The tax authorities highlighted that in January 2026, 16,747 million Mexican pesos (US$973 million) more in IEPS were collected than in the same month of 2025.

“Emiliano Tello [researcher at IMCO] said that both the “health taxes” and the updates that by law are made year after year to the IEPS charged on other products such as gasoline explain the growth in the collection of this tax.”

Read complete original article

Other Articles on Same Topic

  • Banxico board minutes: members see IEPS price impact as “focused, contained, and transitory” (Expansión)
  • IEPS revenue hit record 159 billion pesos in 2025; alcohol revenue grew only modestly, from 25,354 to 25,968 million pesos (Punto por Punto)
  • IEPS on sugary drinks expected to nearly double revenue to 75 billion pesos in 2026 (El CEO)

Assessment

Mexico’s healthy tax package is working. Revenue from IEPS on sugary drinks, tobacco, and gambling surged in January, and the Banco de México has confirmed that the higher taxes are transmitting into consumer prices – precisely the mechanism that makes pro-health taxation effective at reducing affordability and consumption over time.

The glaring gap in this success story is alcohol. Despite sustained advocacy by civil society organisations and a World Bank analysis showing that alcohol taxes in Mexico are significantly underutilised, alcohol excise rates were left unchanged in the 2026 Economic Package.

The contrast is stark:

  • sugary drinks saw their IEPS nearly double (from 1.64 to 3.08 pesos per litre),
  • tobacco’s ad valorem rate rose from 160% to 200%, and
  • gambling went from 30% to 50%.

But alcohol tax rates stayed exactly where they were – largely due to aggressive alcohol industry lobbying by front groups such as CIVyL, which represents transnational alcohol giants including Diageo, Pernod Ricard, and Bacardi.

The 2025 revenue data underscores the missed opportunity. While total IEPS from health harmingproducts hit a record 159 billion pesos, alcohol IEPS revenue grew only marginally. This stagnation reflects the structural weakness in Mexico’s alcohol tax that the World Bank has identified: an ad valorem system that fails to keep pace with inflation and leaves high-strength products dangerously affordable.

Mexico now has domestic evidence that pro-health taxes raise prices without unintended consequences – exactly what is needed to prevent and reduce alcohol harm at the population level. The logical next step is to apply the same approach to alcohol. 

The health and equity case is the strongest lead: alcohol is a major driver of preventable disease, injury, and death in Mexico, and reducing its affordability protects the people and communities most exposed to harm. 

For decision-makers weighing fiscal priorities, the revenue potential is an additional incentive.

But alcohol taxation advocates have an opportunity to use this fresh data to make a compelling case for urgently raising alcohol taxes to unlock the quadruple benefits for Mexican communities, society, and the economy. In this framing and advocacy, avoiding to make the revenue generation aspect the main story is important to maintain focus on the public health rationale for raising alcohol taxes, particularly in contexts where public trust in how tax revenue is spent remains fragile. 

In addition, Mexico’s case of raising IEPS on health harming products highlights latest science showing the rapid positive effects of pro-health taxation. Mexico’s 2026 healthy tax increases on sugary drinks, tobacco, and gambling are producing results within weeks of taking effect. This confirms findings from a landmark study where researchers reviewed 49 interventions previously established as cost-effective to identify the earliest possible detectable effect on high-level population health targets. The study identified 25 of these interventions qualified as quick buys, including four alcohol policy solutions. Notably, the alcohol policy quick buys, especially raising alcohol taxes, generate positive effects immediately.