Cigars and soft drinks will be more expensive in 2022

The Special Tax on Production and Services (IEPS) that soft drinks and cigarettes will pay in 2022 will be 7.36% as of January 1, 2022, more than double that this year, since the rate was 3.33 percent.

The Ministry of Finance and Public Credit reported that the increase was due to an inflation update, in accordance with the provisions of Article 17-A of the Federal Tax Code.

In this way, the IEPS quota that will be applied to worked tobaccos will be 0.5484 pesos per unit, from the current 0.5108 pesos; while for flavored drinks it will be 1.3996 pesos per liter, against 1.3036 pesos which is currently.

“The quotas applicable to processed tobaccos, automotive fuels, flavored beverages, fossil fuels and the quotas applicable to gasoline and diesel that are destined for the states, will be updated annually and will come into force as of January 1 of each year, “said the agency.

In the Income Law of the Federation, it is estimated that for IEPS the treasury collects more than 505,238 million pesos, of which 46,103 million pesos will be from the special tax on processed tobacco and 32.950 million pesos from the tax on flavored beverages. .

The IEPS for worked cigars is the third concept that collects the most from the heading of the special tax. It is only behind the IEPS for gasoline (318,136 million pesos) and alcoholic beverages and beer (62,820 million pesos).

The tax on flavored beverages was introduced as part of the 2014 tax reform, taxing beverages that contain added sugars. The initial rate was one peso per liter, which was updated in 2018 to 1.17 pesos per liter.

The IEPS for processed tobaccos was introduced in 1981 and has undergone various modifications over time. The most recent of these was in 2011, when it began to be taxed with an ad valorem component and a specific component. The ad valorem component is 160% of the manufacturer’s price, while the specific one is 0.35 pesos per cigarette.

The IEPS update measures for flavored beverages and processed tobaccos will increase the collection derived from the consumption of these products and, in turn, will reduce health spending in the future.

Given the perception that these measures may be regressive, it is important to mention that the decrease in the consumption of flavored beverages and cigarettes reduces health spending.

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