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| Javier Moreno, Leovardo Mata, Jaime Humberto Beltrán and Griselda Dávila |
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| ''Dynamic effect of legal complexity on the value added tax in Mexico'' |
| ( 2025, Vol. 45 No.4 ) |
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| This paper studies legal complexity and its dynamic relationship with the Value Added Tax Law, from its original version published in 1978 to the current version. To this end, the variables structure, entropy, and interdependence of the legal texts associated with the VAT Law constitute the complexity index. A VAR model then finds evidence of Granger causality between legal complexity and VAT, although no cointegration relationship exists. Furthermore, an inverse relationship between the variables is confirmed, quantifying the short-term effect of legal complexity and comparing it for robustness with the estimation of an ARIMAX and generalized OLS model. |
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| Keywords: VAT, legal complexity, VAR, ARIMA, Granger causality |
JEL: H8 - Public Economics: Miscellaneous Issues: General
K3 - Other Substantive Areas of Law: General |
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| Manuscript Received : Aug 18 2025 | | Manuscript Accepted : Dec 30 2025 |
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