Federal Lawmaker Proposes Lowering VAT Rate for Quintana Roo Islands

Mexico City — A federal lawmaker from Quintana Roo has proposed legislation to lower the value-added tax (VAT) for residents of the state’s islands, arguing that higher logistical costs create an unfair economic burden.

Federal Deputy Marybel Villegas Canché submitted an initiative to modify the Federal Tax Code, seeking to establish a special 8% VAT rate for islands including Cozumel, Isla Mujeres, and Holbox. The standard national VAT rate is 16%.

Villegas Canché, who was recently designated to handle border zone affairs for southeastern Mexico, said the proposal stems from her work as secretary of the Finance Committee in the Chamber of Deputies. She explained that current federal tax benefits for border regions primarily consider terrestrial continuity, leaving islands at a disadvantage.

“The objective is to generate conditions of economic equilibrium for those who live on the islands,” Villegas Canché stated, noting that basic products, food, transportation, and services cost significantly more there compared to mainland cities like Playa del Carmen.

The initiative aims to have the federal tax regime legally recognize the unique “insular condition” of these territories.

In a related announcement, the deputy said legislative analysis would continue this week on another proposal to regulate major medical expense insurance. She cited widespread user complaints about excessive premium increases and coverage conditions, particularly affecting older adults.

That separate initiative seeks to establish limits and rules to prevent disproportionate hikes in policies for seniors. Villegas Canché highlighted cases where long-term policyholders face annual premiums exceeding 500,000 pesos (approximately $27,000 USD) upon reaching advanced age.