Mexico’s 2026 Revenue Law Packs a Punch
Mexico’s lower house has approved the 2026 Federal Revenue Law, projecting a record-breaking MXN 10.19 trillion in federal income—nearly 10%, or MXN 892 billion, more than in 2025. The package now heads to the Senate under a fast-tracked October calendar, with the government insisting there are “no new taxes.” That might be technically true, but the fine print tells a different story: nearly everything is going up.
The headline grabber is the IEPS overhaul. The tax on sugary drinks will nearly double, from MXN 1.64 to MXN 3.08 per liter. “Light” beverages with non-caloric sweeteners weren’t spared either, even if there were some concessions—lawmakers tacked on a new, lower IEPS of MXN 1.5/liter after some last-minute wrangling. Sports drinks with added sugars will also be taxed, while certain medical-grade electrolyte solutions remain exempt.
So-called sin taxes are also rising: the ad valorem IEPS for tobacco products will jump from 160% to 200%, and now includes nicotine alternatives. Casinos and online betting will similarly face a rate hike, from 30% to 50%. And in a move meant to curb youth violence, lawmakers introduced a brand-new 8% tax on “violent” video games, specifically those aimed at children and teenagers.
Senator Ricardo Monreal defended the increases as health and social safety measures, not fiscal grabs. “The idea isn’t to raise revenue,” he said (though it does raise quite a bit of revenue, one might point out). “It’s to reduce violence in children and young people.” He insisted the reform is about better oversight, not new taxes—just “more control and vigilance” and a tougher stance on evasion.
Elsewhere in the package, new rules will level the playing field between banks and regular taxpayers. Financial institutions will now have to follow the same rules as everyone else when writing off unpaid loans, under clearer and more stringent criteria. Taxpayers will also get six months to back up a revocation claim or post fiscal guarantees—plus a 10-day grace period if the claim is resolved within that window.
Meanwhile, digital platforms are in for stricter treatment which has created a huge backlash on social media, led by Mercado Libre. Under Article 30-B of the Fiscal Code, tax authorities would gain real-time access to platform data for audit and enforcement. The bill includes stiff withholding requirements that could cause huge liquidity problems for many sellers as withholding tax may be higher than their net margin. The government argues tax and tariff evasion on marketplaces was rife.
For individual sellers earning income via digital platforms, the proposed standard withholding for ISR is 2.5% of gross revenues and 8% for VAT. For legal entities selling goods or providing services through digital platforms, the proposed withholding rate is 4% of gross revenues for ISR, and 20% if the legal entity does not provide its tax ID (RFC) and half of the VAT (8% of revenues) when sellers provide a tax ID (RFC); and 16% or all VAT when they don’t.
Insurance companies win on past, lose on future
One of the most controversial tax disputes over the past seven years has been VAT credits for insurance companies. Since the creation of VAT in 1980, insurers have applied the tax on premium payments and credited it when paying claims. The government under AMLO challenged this, claiming insurance companies such as AXA, Qualitas, Inbursa, BBVA Seguros could not credit the VAT, and thus owed billions of dollars in back taxes, a fight that has led to major international arbitration. The sums involved are staggering, as much as US$8.7bn by some calculations.
The new rules unambiguously impose VAT going forward on both ends—effectively a double charge. However, crucially lawmakers offered a “fiscal incentive”: if insurers dropped legal challenges related to previous years, they would then not have to pay back what they allegedly owed. This represents a huge financial victory for Axa and others. But going forward there will be no relief. Premiums will likely go up to reflect the new law, and consumers will foot the bill. But at least the affected insurance companies will not face near-certain bankruptcy for paying the controversial back taxes.
PAN 2.0: New Logo, Same Old Party?
Mexico’s right-wing National Action Party (PAN) staged a high-profile rebrand this weekend. With a revamped logo, promises of citizen primaries, and a loud break from the PRI, the event was billed as both a return to founding values (“Patria, Familia, Libertad”) and a forward push toward the 2027 midterms and the 2030 presidential race. Under Jorge Romero’s leadership, PAN aimed to signal renewal. The result? Mixed reviews—and plenty of noise.
PAN held what President Claudia Sheinbaum called a tone-deaf launch. “They have very little sensitivity,” she said. “There are tens of thousands of affected families. They could’ve waited 15 days.” In her press remarks, Sheinbaum was blunt: a new image doesn’t change the party’s essence. “It’s the same people, same politics, same ideals.”
Inside PAN, the message wasn’t uniformly received. While national leaders declared an end to alliances with the PRI, officials in Nuevo León quickly clarified that their local coalition remains intact. It’s a “national break” with local exceptions, a formula that risks voter confusion more than party renewal.
Substantively, the relaunch included three pillars: a final split from the PRI, candidate selection via open primaries and surveys, and a push for digital affiliation to boost grassroots engagement. Party insiders say this is a pivot back to civic roots.
Political analysts were more skeptical, though not uniformly so. “It’s marketing from a party in electoral crisis,” said Alberto Aziz, noting that PAN’s post-2018 strategy of partnering with the PRI only deepened voter disenchantment and blurred its ideological profile. Changing logos, he argued, won’t reverse a long-standing identity crisis. Other experts believe the relaunch represents both a threat to Morena and a potential lifeline for the opposition. By distancing itself from the PRI and promising open affiliation processes and candidate selection through surveys or primaries, the new PAN could regain competitiveness—especially if it manages to wrest viable candidates from Morena and appeal to more “citizen-oriented” profiles. However, the party risks undermining this momentum by veering toward far-right rhetoric and aligning itself with ultraconservative positions, a move that could alienate moderate voters and reinforce internal divisions.
Free Trade on Paper, Red Tape in Practice
Appearing before the Senate, Economy Secretary Marcelo Ebrard delivered a candid assessment of Mexico’s current trade climate, calling it “the most difficult period” the country has faced in years. His remarks centered on the erosion of multilateral norms under Donald Trump’s trade agenda, particularly the shift away from comparative advantage toward cost-based market access. Citing unilateral U.S. measures like Section 232 tariffs and stalled auto rules-of-origin panels, Ebrard made clear that many of the treaty’s current tensions are “decisions from you”—a direct message to Washington. Yet the tone remained diplomatic: Mexico seeks to resolve outstanding issues ahead of the 2026 USMCA review to preserve free trade and avoid escalation.
Despite the friction, Ebrard projected confidence in the treaty’s survival. “It will remain; it will survive,” he declared, noting that over 80% of Mexican exports still enter the U.S. duty-free—outpacing even EU or Chinese access. He pointed to high-level diplomacy, including a personal call by President Claudia Sheinbaum that helped avert a 25% blanket tariff threatened by Trump. At home, the administration has launched consultations with 30 industries in all 32 states to unify its negotiating position. With foreign direct investment at record highs and new export goals—particularly in under-leveraged sectors like pharmaceuticals—Ebrard closed with optimism: “I have no doubt that the strategy led by our President will succeed.”
As Mexico prepares for the 2026 USMCA review, a high-level business delegation led by the Consejo Coordinador Empresarial (CCE) has launched a three-day working mission in Washington to reinforce the message that the Mexican and U.S. economies are complementary, not competitive. The group is meeting with U.S. lawmakers, labor unions, think tanks, and business organizations to build support and shape expectations ahead of the formal talks. The mission also includes Mexican government officials from the Ministries of Economy, Labor, and Foreign Affairs, signaling coordinated effort across both sectors.
One of the delegation’s core objectives is to present evidence of Mexico’s recent labor reforms, an area under close scrutiny in Washington. Cervantes emphasized progress on minimum wage increases, union freedom, and improved workplace standards, noting that these advances reflect joint commitment from both government and industry. The visit comes amid signals from the U.S. Commerce Department that the upcoming review process may unfold along bilateral, not trilateral, lines, a shift that adds urgency to Mexico’s outreach. While the formal negotiations are still months away, the groundwork being laid now may shape whether the 2026 review becomes a technical update, or a full-scale reset.
Reprieve on heavy truck tariffs, not buses
On Friday Mexico won a temporary reprieve from the new 25% U.S. tariff on imported medium- and heavy-duty trucks under Section 232 of the Trade Expansion Act (link).
The Trump administration clarified that vehicles and parts compliant with the United States-Mexico-Canada Agreement (USMCA) will be exempt from the full duty, with tariffs applying only to the non-U.S. content in each truck. Buses, however, were not as fortunate: imports of Mexican-built school, transit, and motor coaches will face a 10% tariff with no U.S.-content exemption, hitting Mexico-based producers like Mercedes-Benz and Volvo.
This protects Mexico’s dominant position as America’s largest supplier of heavy trucks—worth $25.9 billion in exports in the first seven months of 2025—while Washington finalizes rules to tax foreign components. The exemption follows talks between President Claudia Sheinbaum and U.S. officials and mirrors earlier relief granted to Mexico’s light-vehicle exports. However, the measure may be temporary: once the Commerce Department establishes a process to calculate non-U.S. content, Mexican trucks could again face higher tariffs. For now, the decision avoids major disruption to Mexico’s booming truck-manufacturing sector.
SCJN Slams the Door on Stalling Tactics in Amparo Cases
Just three days after reforms to Mexico’s Amparo Law took effect, the Supreme Court (SCJN) wasted no time in putting them to use. In a 7–1 vote, the Court ruled that judges and justices can no longer be disqualified from hearing cases over “accessory” matters—like recusals based on procedural motions that don’t affect the core of a case. The decision sets a new precedent aimed squarely at stopping dilatory tactics, particularly in high-stakes cases like those involving Grupo Elektra, which has repeatedly challenged fiscal rulings through procedural appeals.
The case was presented by Justice Yasmín Esquivel Mossa, who argued that under the new Article 59, Section II of the Amparo Law, recusals are only valid if a judge’s impartiality is directly in question on the substance of the case. Simply put, the Court drew a line: no more strategic recusals during side proceedings like impediment hearings. Chief Justice Hugo Aguilar Ortiz supported the move, calling it a “resolved contradiction” now clarified by the law. With this ruling, the Court is signaling: the courtroom is for arguments, not for stalling.
Contact:
Laura Camacho
Executive Director Miranda Public Affairs
laura.camacho@miranda-partners.com
Gilberto García
Partner and Head of Intelligence
gilberto.garcia@miranda-partners.com
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