The Senate of Mexico has received a full policy debrief on the ‘Special Taxes on Production and Services’ (IEPS) sought by the MORENA government as an economic measure of the 2026 Budget.
The MORENA briefing was submitted to the Joint Committees of Finance and Taxation, overseen by Senator Manuel Huerta Ladrón de Guevara, who will lead the Senate’s review of the proposals.
The committees will be tasked with assessing the plan to apply new IEPS taxes on gambling, violent video games, tobacco and sugary drinks, evaluating their broader economic, social and consumer impact before the legislation proceeds to a final vote.
Under the proposal, the IEPS tax rate on gambling, games of chance and lotteries will increase from 30% to 50%, extending for the first time to include digital gambling platforms and online raffles, whether operated by domestic or foreign companies.
Filing the debrief, the MORENA government stated: “The proposed tax is a public policy measure to reduce child and adolescent exposure to such content, as well as generate income to reduce the social and health costs associated with its consumption.”
The briefing further confirmed that a specific tax per litre on sugary drinks would be introduced to the budget, including those containing added sweeteners, broadening the spectrum of the tax already imposed on flavoured beverages.
In addition, the plan extends excise duties on tobacco and nicotine-based products, introducing a 200% levy on nicotine content calculated per milligram, a measure that aligns with public health and fiscal sustainability priorities.
The Sheinbaum administration estimates that the expanded IEPS regime will raise MX$41 billion (€2.5 billion) in additional revenue. Combined with tighter customs enforcement and improved tax collection, the plan forms part of a wider fiscal strategy to close a budget shortfall of MX$1.4 trillion (€70 billion) and fund flagship social programmes.
As outlined in the government’s submission, “The bill, which is part of the 2026 Economic Package, seeks to revise the IEPS schemes to meet criteria for public health, social responsibility and fiscal sustainability. The changes now approved are scheduled to take effect on 1 January 2026, after the corresponding legislative stages are completed.”
The proposals have nonetheless met with criticism from business and consumer groups, who argue that the government failed to conduct proper consultations on the implementation, timeline or economic implications of the new taxes.
Operators warn that steep increases could drive consumers toward the black market, particularly in the gambling, tobacco and alcohol sectors. Critics further highlight the lack of oversight provisions and note that MORENA has yet to modernise Mexico’s outdated Federal Gaming and Lottery Law of 1947, which has remained in place for more than 80 years.
Opposition parties have heard the pleas of the gambling sector, with federal legislator Ricardo Mejía Berdeja of Partido del Trabajo (Workers Party) tabling a bill of reforms to the Chamber of Deputies.
Draft proposal call for the Mexico to increase its gambling age to +21, with committees tasked with establishing the first legislative framework to govern online gambling licences. Yet as stands no MORENA minister has endorsed the mandate, that remains in the sidelines – despite MORENA officials recognising glaring liablities in Mexico current gambling regime.
Senators are expected to debate how long the new IEPS measures should remain in effect, and whether penalties and enforcement provisions should be aligned under the Criminal Code, including sanctions for non-compliance and illegal operations.
The outcome of the committee review will determine whether President Claudia Sheinbaum can pass her first national budget without major amendments.
With public sensitivities running high particularly over the perception that the reforms “punish the average Mexican consumer” the passage of these unpopular sin taxes will serve as an early test of MORENA’s fiscal credibility, political cohesion and willingness to reform.
