coholic beverages with added sugars, excluding 100% juices and beverages with artificial sweeteners. The SSB
tax in Mexico is higher for larger package sizes that are relatively less expensive compared to smaller package
sizes. Published evidence suggests that SSB prices increased on average by the amount of the tax,1,2 household
purchases and sales of taxed beverages decreased by about 7.6% two years after the tax was implemented (hi-
gher reductions among low-income households and high SSB purchasers) and purchases of untaxed beverages
increased.3-5 There were no negative effects on employment in the industry that produces SSB or in the retail
stores.6
Empirical evidence suggests positive impacts on oral health,7 small reductions in overweight and obesity
among adolescents’ girls and a modelling study projecting reductions in obesity and diabetes.8,9
Despite these positive effects, the tax is small as it currently represents 5.3% and 6.5% of final prices (for a
355ml comparable brand of SSB carbonated beverage and 1,000ml respectively) in contrast with the SSB taxes
in other countries in Latin America and the Caribbean such as Belize, Chile, Ecuador with shares between 12.7%
to 22.4%.10 Globally, 61 countries have implemented SSB taxes with different amounts and designs that could
be considered to propose a redesign of the current policy in Mexico. Most of the implemented taxes are volu-
me-based (46%), 27% are ad valorem, 17% are tiered volume based and 10% sugar-based.11 Ad valorem taxes
are not recommended as the pass through tends to be lower -more prone to price differentiation- and are less
effective to reduce consumption.11 Specific taxes are effective in targeting the harmful ingredient (sugar), their
revenues are not subject to variations in prices and they are more effective in reducing consumption.11 Although
few countries have implemented taxes based on sugar content, they may be more effective in reducing sugar
consumption as in addition to the response to an increase in prices, they incentivize product reformulation. A
modeling study that simulated a tiered tax design for the SSB tax in Mexico -same tax rate- based on the United
Kingdom and South Africa taxes, showed that under a scenario with no reformulation, reductions in volume are
similar comparing the tiered SSB tax the current volumetric SSB tax; however, with reformulation there are larger
reductions in sugar content for the tiered tax but lower revenues.12
To explore potential increases in the tax rate and a redesign of the current SSB tax in Mexico, this report des-
cribes first the current SSB tax in Mexico (tax rate, beverages included, fiscal revenues, adjustments to inflation);
updates a previous systematic review on the impact of SSB taxes on prices, purchases/sales or consumption,
employment and health to compare with the effectiveness of the tax in Mexico. Then, based on the limitations of
the current tax and findings from the literature review, this report presents a proposal for a tax redesign and tax
rate increase, changes in prices, consumption and revenues.
Investigador responsable
