The illicit tobacco trade in Mexico could cost the treasury 35 billion pesos (approximately US$2.033 billion) despite the proposed increase in the Special Tax on Production and Services (IEPS) included in the 2026 Economic Package, experts warned.
In a statement, Gastón Zambrano, president of the National Council of the Tobacco Industry, noted that “the IEPS adjustment that took effect on January 1st has significantly accelerated the expansion of the illegal market in the country and intensified unfair competition between legal and counterfeit products.”
Zambrano participated in a meeting organized by the Ministry of Economy in coordination with the Council of the Americas, which brought together various industries affected by smuggling and the informal economy, such as tobacco, alcoholic beverages, pharmaceuticals, and textiles, to exchange analyses on the impact of this illicit trade on the economy, security, and public finances.
The specialist explained that, “starting this year, the price of legal cigarette packs increased by up to 16 pesos (US$0.93) per pack” and called for “freezing the planned increase to the Special Tax on Production and Services (IEPS),” which aims to cause “annual increases of 8% until 2030” and, therefore, widen the “gap between legal and illegal products.”
Likewise, Manuel Pérez Aguirre, a researcher at the Colegio de México, pointed out that after the IEPS increase, the loss to the public treasury from the illegal sale of tobacco could reach 35 billion pesos.
“Organized crime has developed a multi-million-dollar mixed strategy that combines smuggling and local manufacturing, generating asymmetrical competition: while an illegal pack can be sold for 12 pesos (US$0.70), legal products reach prices close to 100 pesos (US$5.81),” he argued.
Ragnhild Melzi, Vice President of the Council of the Americas, also emphasized that combating illicit markets is a “shared priority between the public and private sectors,” as it constitutes a “parallel economy” that strengthens the resources of criminal groups and hinders the growth of formal economic activity in the region.
Prior to this meeting and the modification of the Special Tax on Production and Services (IEPS), the National Chamber of the Transformation Industry (Canacintra) had already warned the Mexican government of the negative effects of this increase, which would strengthen the illegal tobacco market.
Source: laconexionusa
