Mexico's $42 cruise passenger tax delayed following backlash

A new tax on cruise passengers visiting Mexico has been delayed following backlash from the industry.

A $42-per-guest charge is now expected to take effect on July 1, 2025 rather than Jan. 1, says the Florida-Caribbean Cruise Association (FCCA).  

“While the proposed postponement provides a temporary reprieve, FCCA stresses that more comprehensive measures are required to address broader concerns about the tax’s devastating impact on cruise tourism, Mexico’s economy, and the livelihoods of its coastal communities,” the trade organization wrote in a news release on Sunday (Dec. 8).

Mexico’s Senate approved the measure last week after it passed in the lower house, the Associated Press reported. Two-thirds of funds collected will go towards funding the country’s army.

Under the new policy, cruise passengers will be required to pay the fee whether they disembark their ship or not.

At $42 per person, it’s a significant chunk of change. A family of four would end up paying $168 for the new levy, which would likely be collected by cruise lines.

Previously, cruise ship travellers were exempt from any taxes because they were considered to be “in transit” under the Non-Migrant Rights policy, according to the Mexican Association of Shipping Agents (AMANAC).

Still, it’s 213 per cent more than the average cost at Caribbean ports, the FCCA points out, raising questions about the competitiveness of Mexican destinations in the global cruise market.

The FCCA warns that placing such a burden on cruise tourists with minimal time actually spent in Mexico will deter visitors, alter cruise itineraries, and create economic ripple effects in communities that heavily rely on cruise tourism.

According to the cruise industry association, even a modest 15 per cent reduction in cruise ship calls to Mexican ports could negate the intended economic benefits of the tax.

With more than 10 million passengers expected in 2025, even a minimal decrease in cruise traffic “would result in millions of dollars in lost revenue” for local businesses, tours, and services – offsetting or even surpassing the total tax revenue projected from the measure, the organizations says.

Such outcomes could inflict significant harm on Mexico’s tourism-dependent communities, undermining the tax’s purpose.

“The impact of this tax on Mexican tourist destinations will be disastrous,” stated the Mexican Association of Cruises. “If implemented, we expect to see a progressive drop in arrivals, which will significantly affect employment for taxi drivers, tour guides, artisans, waiters, restaurateurs, craft store owners, pharmacies, and more. This also impacts artisanal suppliers from regions like Chiapas, Guerrero, Oaxaca, Sinaloa and others who support the ports where cruise ships dock. Less income means fewer jobs and lower tax revenues for the government. Mexico will lose its competitiveness, becoming one of the most expensive cruise destinations in the world.”

In the release, Michele Paige, CEO of FCCA, emphasized the importance of addressing long-term concerns despite the temporary delay.

“We thank the Mexican government for listening to our concerns and proposing a delay in the implementation of the tax that will fall mainly on American citizens. However, the removal of the in-transit tax exemption – which was provided to our industry over a decade ago for valid reasons that still apply today – was done without our prior input and after the legislation was passed. It is ironic that until this law was abruptly announced the industry was looking to grow business in Mexico, and now the opposite will occur,” Paige said.

She noted that the delayed communication from the federal government “does not demonstrate an authentic commitment” to collaborate with an industry that has a long-standing history of meaningful economic development for the country.

“We look forward to the opportunity to continue meaningful dialogue around a balanced solution that protects Mexico’s communities, supports its vibrant tourism industry, and ensures the affordability of cruise travel for our guests,” she said. “We also thank the many other destination partners we have across Central America and the Caribbean who have already reached out to our member lines and invited them to relocate itineraries to their jurisdictions with open arms.”

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