The Mexican Tax on Alcoholic Beverages: Reasons to Change It

Anel Rodríguez Quinto () and Luis Antonio Foncerrada Pascal ()
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Anel Rodríguez Quinto: Texas A&M University
Luis Antonio Foncerrada Pascal: Universidad Anáhuac Mayab

Economía: teoría y práctica, 2022, vol. 57, issue 2, 193-214

Abstract: Excessive consumption of alcoholic beverages causes addiction, damages people’s health and has disrupting social and family consequences. Given that, many countries impose other taxes on these products in addition to sales tax. The ways these taxes are applied varies, though they are based on two basic principles: Ad-Valorem2 or Ad-Quantum.3 i n the case of mexico, the Special Tax on pro-duction and Services (IEPS, Spanish initials) for alcoholic beverages is based on an ad-Valorem system with different quotas according to alcoholic content, thus combining the two principles. However, with this system, lower quality beverages with high degrees of alcohol are among the cheapest on the market, curtailing the objective of the tax. We have tested the change to the ad-Quantum system, to measure government revenues and regressive effects. our findings indicate that tax collection would increase with no regressive effects

Keywords: Tax; alcoholic beverages; Ad-Quantum system; health risks; tax collection (search for similar items in EconPapers)
JEL-codes: H21 H23 H31 I12 I14 I39 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:ety:journl:v:57:y:2022:i:2:p:193-214

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