ANPEC Warns Higher IEPS on Drinks, Cigarettes Could Hurt SMEs

Proposals to increase the Special Tax on Production and Services (IEPS) on high-consumption products are raising alarm as Mexican households continue to grapple with food inflation, the Alianza Nacional de Pequeños Comerciantes (ANPEC) warned.

“They call it a ‘healthy tax,’ but over a decade of experience shows it only generates more revenue without ensuring it goes to health programs,” ANPEC said on X. “Higher IEPS on products like soft drinks and cigarettes punishes families and small shops.”

According to the group, the average cost of the Basic Food Basket rose to MX$1,979.15 (US$107.7) between August and September, up MX$12.79 or 0.65%. Tlaxcala (+5.13%), Baja California Sur (+4.57%), and Chiapas (+3.33%) were among the most affected states. Items with the sharpest price increases included onion (8.86%), green tomato (7.70%), potato (4.27%), toilet paper (4.19%), and laundry soap (4.04%).

ANPEC estimates food prices have climbed 33% in recent years, outpacing wage and social support gains. Roughly 40% of households spend up to 90% of their income on food, impacting more than 14 million families.

Más impuestos = más contrabando, piratería e informalidad.
La medida fortalece al mercado negro y pone en riesgo a comerciantes y consumidores.#NoMásImpuestos #QueNoNosBajenLaCortina

— ANPEC (@ANPECmx) September 25, 2025

The debate comes as proposals circulate to expand the 16% value-added tax (IVA) and raise IEPS rates. Suggested measures include hiking the tax on sweetened beverages by as much as 87%, extending it to “light” versions, and doubling cigarette taxes, which would add about MX$20 per pack.

ANPEC warned such steps could backfire, fueling informality, smuggling, and job losses, while deepening social strain. The group also highlighted the burden of cobro de piso extortion fees, which already weigh heavily on producers, distributors, and retailers.

“Instead of more taxes, the government should support local economies and protect small retailers,” ANPEC stressed, announcing a petition to President Claudia Sheinbaum, Congress, and the Finance Ministry to halt reforms that disproportionately impact small businesses.