They call for higher "healthy" taxes to curb the obesity and diabetes epidemic in Mexico.
Through the study "Healthy Taxes. More Resources for Public Health," conducted by the Fundar Center for Analysis and Research, together with El Poder del Consumidor, the organizations emphasized the importance of increasing these taxes on both consumers and businesses to reduce the "epidemiological emergency" of obesity and diabetes.
"Right now, the leading cause of illness and death in this country is related to the consumption of these products," explained Alejandro Calvillo, director of El Poder del Consumidor, who attributed the increase to advertising, availability, price, and company promotions.
Iván Benumea Gómez, coordinator of Fundar's Tax Justice program, reported that the economic costs caused by alcohol (2.07% of GDP), tobacco (0.57%), and obesity and diabetes (1.78%) reach 4.42% of the country's Gross Domestic Product (GDP), while the revenue obtained from taxes known as "health" is 0.6%.
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"The costs we are paying through many taxes, through the resources allocated to the healthcare system, are not capable of addressing the damage caused by these products," Calvillo explained.
The report proposes changing three pillars: "strengthening special taxes on production and services (IEPS) for products harmful to health"; reforming the General Health Law to allocate funds to the population without social security; and increasing income tax (ISR) payments by industries.
The plan proposes increasing the price of cigarettes by one peso ($0.053), which would increase revenue by 30.1% and reduce tobacco sales by 13.9%. For alcohol, a specific quota would be established per liter of pure alcohol, which would result in 42.9% more revenue than in 2023. Flavored beverages, consumed daily by 80% of the Mexican population, would increase from 1.67 pesos ($0.088) per liter to 7 pesos ($0.37). Ultra-processed products, such as chips and snacks, would increase from 8% to 20%, with the goal of reducing their consumption.
Another point, guaranteeing funds for people without social security, would see a 21% increase in the collection of these taxes, which would increase the programmable spending of the 2024 Federal Expenditure Budget by 3.1%. Regarding the increase in income tax for the alcohol, tobacco, beverages, and ultra-processed product industries, which pay an average rate of 3.82% of their income, the study calls for reducing tax benefits for companies, creating a higher rate for "making profits after analyzing activities harmful to public health," and for these to offer greater financial transparency.
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Alejandra Macías Sánchez, executive director of the Center for Economic and Budgetary Research (CIEP), explained that these policies must be accompanied by others focused on healthy food and with planning for the allocation of these revenues. Itziar Belausteguigoitia, technical officer in tobacco economics at the Pan American Health Organization (PAHO), explained that lower-income groups, who have a higher incidence of these diseases, are those most likely to reduce their consumption, which would lead to a lower incidence of these diseases in this population group.
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