Senate Prepares Cigarette Tax Hike Bill
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April 01, 2010
Mexico City – The Health Commission of the Senate yesterday finished the first draft of a bill which seeks to reform the Law on Production and Services Tax (IEPS) in order to increase the price of a package of cigarettes by 6 pesos in 2011. The benefits would be redistributed to finance medical treatments of diseases generated by tobacco use, including asthma, pulmonary emphysema, chronic bronchitis, cerebrovascular diseases, lung and trachea cancers.
The draft, which will be presented to the Senate next week, argues that increasing the price of cigarettes is a policy already adopted by the World Health Organization (WHO), which considers that “increasing the price of tobacco by increasing its tax is the most effective way to reduce tobacco use and to encourage consumers to quit smoking.”
The PAN senator and President of the Health Commission, Ernesto Saro Boardman, who is also the initiator of the bill, said that increasing the IEPS on tobacco by 20 points (from 160 to 180 percent) would aid in reducing tobacco use by 4 percent, while generating approximately 20 billion pesos per year for the implementation of health care measures.
“The proposal seeks to increase the IEPS on tobacco by 20 points... in order to generate funds to treat diseases linked to tobacco use, while ensuring that these diseases do not affect the nation’s health care budget. More people die from tobacco than from AIDS, the H1N1 virus or uterus, breast and prostate cancers,” Saro said.
According to the draft, which is currently being analyzed by the Treasury Secretariat and by the Public Budget and Economy Secretariat, tobacco represents up to 10 percent of smokers’ budgets.
“(The increase of the IEPS on tobacco) not only allows for a better financing and redistribution of the public budget, but it is also an efficient tool to reduce tobacco use, particularly among young people,” Saro said.
According to the draft, 65,000 persons die from tobacco use each year in Mexico.
On average, 22,000 people die from asthma, 17,000 from pulmonary emphysema and chronic bronchitis, nearly 14,000 from cerebrovascular diseases and 6,000 from lung and trachea cancers.
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