Abstract
The objective of this study is to assess the effectiveness of payroll tax (ISN, by its acronym in Spanish) and accommodation tax (ISH, by its acronym in Spanish) collection at the state level in Mexico from 2010 to 2020. Using a panel of data from all 32 states in Mexico, we employ the Stochastic Frontier (SF) approach with a semi -normal distribution of random errors. States with high efficiency in ISN do not always align with those with the highest GDP or lowest intergovernmental transfers. Our analysis suggests that states with beach front locations and tourist attractions tend to exhibit greater efficiency in ISH collection. These findings provide valuable insights for policymakers, offering a solid foundation for informed decision-making to improve the fiscal landscape in Mexican federal entities.
