Mexico’s Sugar Tax Sees Success
January 8, 2016 Taxation in Mexico
MEXICO CITY – Despite previous doubts, Mexico’s sugar tax has reduced the consumption of sugary drinks in the country.
The sugar tax recently enacted in Mexico has been shown to have had a positive effect on consumer spending habits, with consumption of sugary beverages having fallen since the measure was put into force.
In 2014 Mexico introduced a tax of 10 percent on the sale of sugar-sweetened drinks, a move which placed Mexico at the forefront of countries introducing tax measures aimed at reducing the consumption of unhealthy foods.
According to the results of the study, the tax led to a 6 percent reduction in the sale of sugary drinks, compared to the average level of sales of the previous two years.
Further, in 2015 the level of sales was 12 percent lower than the previous level of sales.
It was also found that the reduction sales was equal among all consumers, with low-income consumers seeing the largest decrease, with sales falling by 17 percent.
While sales of sugary drinks fell, the sales of non-taxed sugar free drinks rose by 4 percent.
It was also noted that while the effect of the tax was only moderate, it was also initially expected that a tax on sugary drinks would not be effective unless the rate was set at 20 percent, an assumption was proven wrong by the real results.
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