Una ruta de reforma con bienestar social a los impuestos indirectos en México

Luis Huesca and Linda Llamas
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Linda Llamas: Universidad Estatal de Sonora

El Trimestre Económico, 2025, vol. 92 (2), issue 366, 309-346

Abstract: This paper discusses the feasibility of a value-added tax (VAT) reform in Mexico, as a path to increase revenues progressively with social welfare. It proposes a novel method of decomposition of the Kakwani index, as it allows the detection of the categories of expenditure that contribute the most to progressivity or regressivity. It obtains indirect taxes using Mexmod—the tax-benefit microsimulation model for Mexico—to analyze the effect of two hypothetical reform scenarios. Results show that luxury goods can improve progressivity if vat is raised, while food, public transportation, medical services, payment of household services, and maintenance are more likely to be regressive. Therefore, the tax burden from the vat reforms would fall more heavily on high incomes as the low-income households are compensated with a progressive transfer and would potentially increase revenues from the current 4.1 to 5.2 and 6.2 gross domestic product (GDP) points on each scenario, being able to eradicate extreme poverty. Based on this evidence, fiscal policymakers can make the best decisions while prioritizing social welfare and equity of tax payments.

Keywords: Tax revenues; indirect taxes; tax reform; Mexico. (search for similar items in EconPapers)
JEL-codes: E62 H22 H24 H25 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:elt:journl:v:92:y:2025:i:366:p:309-346

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DOI: 10.20430/ete.v92i366.2492

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