Mexico Begins Taxing Convenience Foods

Beginning this month, a 16% tax will apply to all pre-packaged and ready-made food at c-stores.

July 06, 2015

TIJUANA, Mexico – Beginning this month, Mexican consumers will be paying a new, 16% sales tax on pre-packaged and ready-made food sold at convenience stores. The nationwide tax – which includes a broad range of foods such as pizza, hotdogs, sandwiches and burritos – is Mexico’s latest move to rein in high obesity rates.

The ready-made food tax is expected to have a disproportionate impact on Mexican residents along the U.S. border, in cities like Tijuana, as the region recently raised its general sales tax from 11% to 16%.

Gilberto Leyva Camacho, president of Tijuana’s Chamber of Commerce, told news sources that the new sales tax didn’t go into effect for ready-made food at convenience stores until Wednesday. “The people who are most going to be hurt by this are low-income consumers,” he told local news outlets. “Many who are in a rush often buy a hotdog or a hamburger.”

Camacho said he thinks the sales tax is going to promote Mexico’s informal, non-taxed economy, because the tax doesn’t apply to mobile street food vendors who sell the same food that residents would find at a convenience store.

The tax is also expected to increase border crossings to San Diego, as Tijuana residents may prefer to buy pre-packaged foods where they are cheaper.

In 2013, Mexico passed a nationwide 8% tax on sugary drinks and junk food.

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