Mexico Proposes Higher Taxes on Gambling and Video Games

Mexican authorities included in the 2026 economic package a sharp increase in “sin taxes” on tobacco, sugary drinks, and gambling.

Key Changes in Tax Policy

Finance Minister Edgar Amador has proposed several measures aimed at boosting government revenue and reducing consumption of products considered harmful to health.

Key changes include:

• Gambling: increase of the special IEPS tax from 30% to 50% of GGR on online betting.
• Video games with violent content: introduction of an 8% tax on digital gaming services.
• Sugary drinks and beverages with non-caloric sweeteners: IEPS increased to 3.08 pesos per liter.
• Tobacco products: ad valorem rate raised from 160% to 200%, gradual increase of the specific tax until 2030, and inclusion of new nicotine products (e.g., “nicotine pouches”).

Reasons for the Tax Increase

The administration of President Claudia Sheinbaum justifies the new taxes by citing the economic and social impacts of consuming these products:

• High healthcare costs due to obesity and diabetes caused by sugary drinks.
• Psychological and social effects on teenagers from violent video games — aggression, anxiety, and social isolation.
• Financial losses for families associated with the growth of online casinos.

It is estimated that annual expenses for treating diseases linked to sugary drinks, tobacco, and other addictions reach around 116 billion pesos.

Implementation Plan and Budget Expectations

The tax changes are part of the “sin taxes” section of the 2026 economic package. It is expected that:

Authorities emphasize that these measures are part of a broader effort to promote public health while increasing fiscal resources to support social programs.