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Mexican soft drinks tax

Summary

9 September 2013

The Mexican president, Enrique Pena Nieto, has proposed a higher tax on soft drinks to help tackle the country's serious obesity¹ problem. Mr Pena Nieto described it as a health tax for Mexico, which has the second highest rate of obesity in the world.

Reporter:

Will Grant

Report

Promising² that the fiscal³ reform was "good news for Mexicans", President Enrique Pena Nieto unveiled a wide-ranging proposal which managed to sidestep a political controversy⁴ about sales tax on food and medicine.

Those would remain unchanged, undermining a central part of the left's opposition⁵ to the reform programme. But a hike in the tax on soft drinks was included. In part, the government hope it will help tackle the country's serious obesity problem. Mexico has the second-highest obesity rates in the world after the United States.

However, the reform is also intended to deal with Mexico's weak tax revenues. The country's coffers urgently need bolstering⁶ and the intention was that long-running loopholes, which have allowed large corporations to benefit for decades, would be closed.

In particular, there were calls to impose greater taxes on the country's top earners, including the world's richest man, Carlos Slim.

However, the final document appears to have been watered down in that regard. The proposal must now be approved by Congress and the Senate, as well as a majority of Mexico's states.