Mexico's Fiscal Strategy for 2025 Revealed

Mexico expects to raise significant revenue from taxes on tobacco, beer, and sugary drinks in its 2025 budget, according to recent estimates. The government projects a total tax revenue of 5.3 trillion pesos, aiming to reduce consumption of harmful products while increasing funds for public services.


Mexico's Fiscal Strategy for 2025 Revealed

According to the Economic Package 2025, total revenue collection is expected to be 9.302 trillion pesos, of which around 5.290 trillion will come from taxes such as income tax (ISR), value-added tax (IVA), and special consumption tax (IEPS). Within these special taxes, total revenue collection is estimated to be 713 billion 844 million pesos.

Regarding special taxes on production and services (IEPS), it is anticipated that collection will reach 713 billion 844 million pesos in the fiscal year 2025. Specifically, different amounts are expected for taxes on cigarette, beer, and soft drinks. For example, alcoholic beverages are expected to generate 26,145.6 million pesos in revenue.

Beers and refreshing drinks would contribute around 52,578.7 million pesos; flavored beverages about 43,330 million pesos, and energy drinks would contribute 245.9 million. For cigarettes, it is estimated that under the category of manufactured tobacco, 52,631.5 million pesos will be collected.

The Organization for Economic Cooperation and Development (OECD) recently recommended increasing tobacco taxes in Latin American and Caribbean countries as part of a fiscal strategy to reduce cigarette consumption in the region. In 2021, approximately 350,000 people died in the region due to tobacco-related respiratory diseases, according to OECD data.

On the other hand, the Government of Mexico projects a tax collection of 5.3 trillion pesos for the next year, as announced by the Secretary of Finance, Rogelio Ramírez de la O, regarding the Economic Package 2025. This tax revenue encompasses various categories, such as ISR, IVA, and IEPS. The projection indicates that tax revenue collection in 2025 will reach 5.3 trillion pesos.