EconPapers    
Economics at your fingertips  
 

Sub-national Revenue Mobilization in Mexico

Luis Cesar Castaneda and Juan Pardinas

No 4806, Research Department Publications from Inter-American Development Bank, Research Department

Abstract: This paper estimates potential Mexican sub-national tax revenues using a stochastic frontier model. The results suggest that states are exploiting their current tax bases, particularly the payroll tax, appropriately. Mexican municipalities, however, have a low rate of tax collection compared to their potential, especially in relation to the property tax, which is their most important source of revenue and relatively simple to collect. Empirical evidence further suggests that tax collection efforts are strongly related to GDP per capita, and that some political economy factors can influence them. Political affiliation, for example, influences municipalities' tax collection effort more than that of states. The analysis of a scenario in which some VAT and PIT taxation powers are returned to the states suggests that a state surcharge on the VAT and PIT could increase states' own revenues. Without broadening the tax base and redefining the revenue-sharing allocation criteria, however, doing so would have a strong and adverse impact on the revenue distribution of sub-national governments.

JEL-codes: H3 H7 H71 (search for similar items in EconPapers)
Date: 2012-11
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.iadb.org/research/pub_hits.cfm?pub_id=37275683 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.iadb.org/research/pub_hits.cfm?pub_id=37275683 [301 Moved Permanently]--> https://www.iadb.org/research/pub_hits.cfm?pub_id=37275683)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:idb:wpaper:4806

Access Statistics for this paper

More papers in Research Department Publications from Inter-American Development Bank, Research Department Contact information at EDIRC.
Bibliographic data for series maintained by Felipe Herrera Library ().

 
Page updated 2022-11-29
Handle: RePEc:idb:wpaper:4806