Effects of Innovation on Tax Administration: Evidence from Municipalities in Brazil

Otávio Gomes Cabello, Ricardo Rocha de Azevedo, Gustavo Hermínio Salati Marcondes de Moraes and Jair Manoel Casquel Júnior

RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), 2026, vol. 30(2), issue Vol. 30 No. 2 (2026): Mar/Apr - 2026, e250278

Abstract: Objective: this study analyzes the effects of adopting innovative tax administration practices on local government revenue, aiming to understand their impact on municipal fiscal efficiency and financial autonomy. Theoretical approach: the research is grounded in dynamic capabilities theory and public sector innovation literature. Innovation is conceived as an adaptive capacity essential for reconfiguring processes and optimizing institutional results, questioning whether the effectiveness of such practices depends on their integration with complementary management strategies. Method: a quantitative analysis was conducted using data from 80 municipalities in the state of São Paulo (population over 100,000) between 2013 and 2022. The study employed linear regression with panel data and fixed-effects models to examine three main taxes: Property Tax (IPTU), Real Estate Transfer Tax (ITBI), and Service Tax (ISS). Results: the update of the generic value map (PGV) showed a positive and significant impact on IPTU revenue. Conversely, tools such as geoprocessing, digital IPTU, and specific ISS programs did not demonstrate direct immediate effects. It was observed that ITBI revenue was more sensitive to external factors and to active debt management, while ISS remained directly dependent on the level of local economic activity. Conclusions: the findings indicate that isolated technological or procedural innovation does not guarantee increased revenue; alignment with governance strategies and institutional integration is essential. The study contributes to the literature by providing empirical evidence on the effectiveness of tax policies and the necessity of managerial capabilities to convert innovation into fiscal performance.

Date: 2026
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