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Increase in the IEPS rate

Pursuant to the provisions of Article 74, Section IV, second paragraph of the Political Constitution of the United Mexican States, the Federal Executive shall submit to the Chamber of Deputies the Income Law Initiative and the Federal Expenditure Budget Bill no later than September 8, and the corresponding Secretary of State shall appear before the Chamber of Deputies to report on the same.

It is expected that, in what is known as the “Paquete Económico” for fiscal year 2020, an upward adjustment of the excise tax on production and services (“IEPS”) will be made.

The Chairman of the Budget and Public Account Committee of the Chamber of Deputies, Alfonso Ramírez Cuéllar, stated that it is advisable to update the IEPS on tobacco, alcoholic and sugared beverages. The above, in order to inject resources into the health system and thus be able to address the diseases associated with the consumption of these products.

It is expected that this increase will be through an increase in the rate of the existing tax, as the President of the Republic has publicly endorsed his commitment not to create new taxes during his term of office.

This proposal is currently being analyzed and discussed in the Budget and Public Account Committee of the Chamber of Deputies. Therefore, it will be known in the next few weeks whether it will finally be included in the “Economic Package” for fiscal year 2020.

If included, the final text of the reform and its implications will have to be reviewed in detail, as well as the possible means of defense available to the governed will have to be analyzed. We will follow up and update on this matter.

Rafael Tena Castro

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