Mexico to tax junk food for revenue and health

The Mexican government's lower house approved a tax on high-calorie foods as part of a broad fiscal package aimed at increasing government revenues. The bill is necessary to avoid a $4.3 billion budget shortfall, Finance Minister Luis Videgaray said. The Los Angeles Times reported Saturday that the government is seeking to increase revenues by $20 billion with a variety of budget changes, including a 16 percent tax on pet foods that has some concerned more pets will be abandoned. Retailers, however, oppose the so-called junk food tax, saying it will cut into business. "It will hurt. Sales will fall, people will stop buying. It hurts them too," said Eusebia Blas Luna, 50, who operates a small candy and soda stand on a Mexico City street corner. "They say this stuff isn't good for you, but everyone gets a craving," she said. Those cravings, however, have helped propel obesity-related diabetes to the top of Mexico's list of causes of death. Data from the U.N.'s Food and Agriculture Organization show that 32.8 percent of Mexican adults are obese, a startling figure given that a generation ago it was malnutrition that was plaguing Mexico, the Times reported. The bill adds a 5 percent tax onto foods that have 275 calories or more per 100 grams. It also taxes chewing gum and soda, the Times said. "The eyes of the world are focused on Mexico," the World Health Organization said in a full-page ad in Mexican newspapers that lobbied for passage of the junk food tax. The group called for even higher taxes to combat an "epidemic of obesity." That doesn't mean it will be a popular bill. Juan Torres, 55, who parks cars for a living, said it was "a cruel way to take away the little pleasures we can give our kids." "How do you tell your children you are so poor you cannot give them a little soft drink?" he said.