Funding Gaps for Diseases Caused by Smoking in Mexico: A Subnational Analysis [Report]

This Report was written by the Centro de Investigación Económica y Presupuestaria A.C. (CIEP) in Mexico. This report compares each state's tax revenue from the IEPS tax on tobacco with the health care costs of treating three smoking-related diseases: acute myocardial infarction (AMI), lung cancer, and chronic obstructive pulmonary disease (COPD). The IEPS tax transfer to all the states was 12.539 billion pesos in one year. In contrast, the nationwide cost of care for the three select diseases is 7.4x higher, at 93.379 billion pesos. In every Mexican state, this results in a significant fiscal gap. Health care costs in each state are between 3x and 12x higher than the IEPS revenues. These numbers only represent a portion of the full tobacco-related health care costs that governments face because the costs of only three diseases among individuals without social security are considered. The report concludes with recommendations to raise excise tobacco taxes to reduce consumption, thereby decreasing the cost of tobacco-related diseases. Further, additional tax revenue collected can be used to improve access to a variety of necessary health care services.

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A Policy Brief based on the report can be found here.