February 26, 2016

Mexican Officials Implement 16% Sales Tax on Pet Food

Government officials in Mexico implemented a 16 percent sales tax on processed pet food. This new tax will go into effect on Jan. 1.


The new tax is intended to increase revenues for the government. Processed pet food sales reach $2.2 billion per year in Mexico, led by companies such as Mars, Inc. and Nestle SA. Globally, Mexico ranks as the 10th largest market for pet food, with the US coming in first collecting more than $20 billion annually.


The 16 percent sales tax will be applied at pet retailer locations. As a result, pet food manufacturers predict a sharp decline in pet food sales, and they claim the tax will impact more than one-third of the country’s low-income households.


Government officials deemed owning a pet as a recreational activity and pet food as a luxury item. In Mexico, approximately 14 million pet dogs and cats live in households, while another 13 million animals live on the streets.


Opponents of the bill said pets are considered members of the family, and pet owners are selective when choosing pet food to improve their pets’ health. Higher prices could also discourage people from adopting pets and lead to an increase in stray animals.

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