Mexico Proposes Sugar Beverage Tax

The country’s government is proposing a special tax on all sugary beverages, in an effort to reduce obesity and Type 2 diabetes.

September 12, 2013

MEXICO CITY – The Mexican government has proposed assessing a special tax on sugary beverages, an effort to contain twin epidemics of obesity and Type 2 diabetes within the country, the Wall Street Journal reports.

Unveiled last weekend, President Enrique Peña Nieto's tax overhaul targets all sugar-sweetened beverages, not just soda. An estimated 15% of people over age 20 in Mexico have adult-onset diabetes.

The bill proposed would apply a tax of one peso (eight cents) for each liter of sugar-sweetened beverage. Additionally, concentrates, powders, syrups, essences and flavor extracts would be taxed based on the amount of sugar-flavored beverage they would yield. The government estimates that the tax would generate more than $900 million a year in revenue.

According to Euromonitor, Mexico is the second-biggest consumer of soda per capita in the world. The country already applies a 16% sales tax to soda.

Coca-Cola's Mexico operation questioned the likely effectiveness of the proposed tax. "To change behaviors effectively, we need to ensure people understand that all calories count, regardless of the source — and that includes our caloric beverages too," the company said.

Mexico’s Congress is expected to approve a fiscal proposal that includes the soft drink tax by mid-November.

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