He highlighted that in 2011, prices increased 30%, which made them unaffordable for certain sectors of the population, so they turned to cheaper illicit options in the informal market.
The Confederation of Industrial Chambers (Concamin) reported that, while in 2010 illicit trade represented 2% of the total market, by 2013 it reached 16.6%, which meant an increase of 800% in the trade of illegal cigarettes. Currently, estimates suggest that illicit trade accounts for up to half of the market.
Rivera pointed out that of every 10 cigarettes sold in the country, two are pirated, of which one is produced locally and the other is imported. ANPEC identified the presence of itinerant factories for the production of illegal cigarettes in the states of Campeche, Jalisco and the State of Mexico, taking advantage of their mobility to evade the action of the authorities.
Affects collection
This also represents an impact on the collection of this tax, since in the informal market payment of taxes is evaded, Colmex says.
The National Council of the Tobacco Industry (Conainta) argues that, historically, tax increases have been ineffective in reducing the number of smokers and that they have not guaranteed greater tax revenue.
The chamber made up of Philip Morris Mexico, British American Tobacco and Japan Tobacco International not only see it as a challenge that the collection is directed towards health spending, but also in the increase that would result from illegal brands in the market, the greater risk of consumption among minors, in addition to the increase in smuggling, which would have a negative impact on collection.
Treasury figures detail that since 2019 this collection has reported continuous annual falls. At the end of 2024, it fell 6.9% in real terms compared to 2023, the second largest, after registering a real annual decrease of 15.5% in 2009; Furthermore, it only generated 0.8% of total State income, its maximum contribution was 1.4% in 2012.
Concamin estimates that tax evasion due to this phenomenon generates annual losses of between 13,000 and 15,000 million pesos to the treasury.
“Criminal groups obtain exponentially greater profits (in unit terms) than legally established companies by evading the payment of health licenses and high IEPS taxes,” Colmex highlighted.
According to the ANPEC, this increase in the tobacco tax is based on two “false ideas”: a decrease in consumption and collection of income to a fund in favor of public health.
However, the evidence of the last 11 years demonstrates the opposite, since consumption did not decrease, the proceeds were not labeled for health, as they ended up in current spending, and chronic diseases were not contained, highlighted the ANPEC.
In 2024, the total economic costs of tobacco consumption amounted to 194.7 billion pesos, 0.57% of GDP. In contrast, the IEPS applied to the sale and import of tobacco barely reached 46,943.1 million, which represented 0.14% of GDP. This means that the costs associated with tobacco consumption in Mexico were 4.1 times greater than the income generated by this concept, Fundar highlighted in its analysis “Healthy taxes, more resources for public health.”
