Tax Hike Threatens Quintana Roo Businesses

Cancún, Mexico — The Council for the Development of Small Commerce and Family Business (ConComercio Pequeño) has warned that a federal proposal to further increase the already high tax burden on cigarettes and soft drinks will not reduce consumption or increase tax revenue. Instead, the group states, it will lower sales for grocery stores, convenience stores, small supermarkets, and other businesses for which these products are a primary source of income due to resulting price hikes.

The proposal is part of the federal government's Economic Package for 2026, presented by the Ministry of Finance.

The president of the organization, Gerardo López Becerra, expressed regret over the proposal. He recalled that in 2010, an increase of seven pesos per pack was approved with the projected goals of discouraging tobacco consumption and raising over 42 billion pesos in revenue for 2011.

The reality, however, was very different. Far from decreasing tobacco consumption and collecting the planned revenue, the government only managed to collect 30 billion pesos, representing a loss of more than 12 billion pesos in expected revenue. Meanwhile, the Ministry of Health acknowledged that cigarette consumption did not decrease but, on the contrary, increased.

From that moment on, the illegal market began to grow rapidly, with annual tax evasion exceeding 13 billion pesos.

The federal government has now proposed raising the Special Tax on Production and Services (IEPS) by more than 30 percent on the price of cigarettes. This would translate to a minimum increase of 20 pesos per pack by 2026.

López Becerra stated that merchants are being blackmailed and threatened into selling illegal cigarette brands to avoid potential attacks on their businesses, extortion payments, or physical or psychological aggression against themselves or their families.

He cited a recent event as evidence of the serious illicit cigarette phenomenon currently plaguing the country: the seizure of more than 10 million packs of illegal cigarettes by Mexico's National Customs Agency at the Port of Lázaro Cárdenas, Michoacán, at the end of August.

The president of ConComercio Pequeño argued that the increase in tobacco taxes cannot be analyzed in isolation. Grocery stores represent a vital part of the national economy and already face multiple challenges, such as unfair competition, insecurity, extortion, and an expanding informal market.

“For this reason, we call on the Legislative Branch to discard the proposal to increase taxes,” he said.