The Impact of NAFTA and Options for Tax Reform in Mexico
The North American Free Trade Agreement (NAFTA) has had a profound impact on Mexico's economy and institutions. Clearly, no consideration of tax reform can ignore its role. The thinking about tax reform in Mexico requires evaluating NAFTA's effect on Mexico's economy, including its tax structure, and the effects of its tax system on trade and capital flows between Mexico and its NAFTA partners, the United States and Canada. The authors review the evidence on NAFTA's economic effects, focusing on the changes in foreign trade and foreign direct investment flows in Mexico and the effects of these changes on Mexico's tax base and ability to raise tax revenues. Using marginal effective tax rate analysis, the authors also compare Mexico's tax system with those of Canada and the United States in terms of the effect on foreign direct investment. The authors draw two main conclusions from their analysis. First, by fueling Mexico's exports and foreign direct investment inflows, NAFTA has altered the country's economic structure and hence the industrial distribution of the tax base. This transformation calls for adapting the tax structure to an economy oriented toward services and manufacturing exports. And second, Mexico's membership in NAFTA provides no significant reasons for fundamental change in its tax structure. The new wave of tax reform should concentrate on raising revenues, simplifying the tax structure, and increasing the efficiency and overall equity of the tax system.
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dig-okr-10986195362024-08-08T18:00:14Z The Impact of NAFTA and Options for Tax Reform in Mexico Martinez-Vazquez, Jorge Chen, Duanjie ACCOUNTING AGRICULTURE APPAREL ARBITRAGE BORDER TRADE CAPITAL FLOWS CAPITAL GOODS COMMODITIES COMPETITIVE ADVANTAGE CORPORATE INCOME TAX CORPORATE INCOME TAXES DEVALUATION DIVIDENDS DOMESTIC DEMAND DUMPING ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC EFFECTS ECONOMIC GROWTH ECONOMIC IMPACT ECONOMIC INTEGRATION ECONOMIC LIBERALIZATION ECONOMIC SECTORS ECONOMIC STRUCTURE EMPLOYMENT ENERGY TAXES ENGINE OF GROWTH EXCHANGE RATE EXCHANGE RATES EXPORT GROWTH EXPORT MARKETS EXPORT SECTORS EXPORTERS EXPORTS FOREIGN COMPETITION FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN GOODS FOREIGN INVESTMENT FOREIGN INVESTMENT LAW FOREIGN INVESTOR FOREIGN INVESTORS FOREIGN OWNERSHIP FOREIGN TRADE FORESTRY FREE MOBILITY OF LABOR FREE TRADE FREE TRADE AREA GATT GDP GOVERNMENT EXPENDITURES IMPORT DUTIES IMPORT DUTY IMPORTS INCOME INCOME DISTRIBUTION INCOME TAXES INDUSTRIAL SECTOR INFLATION INSURANCE INTELLECTUAL PROPERTY RIGHTS INTERMEDIATE INPUTS INVENTORIES INVESTMENT FLOWS INVESTMENT LIBERALIZATION LOCAL GOVERNMENTS MACROECONOMIC ADJUSTMENT MACROECONOMIC INSTABILITY MULTINATIONAL FIRMS NATIONAL TAXES OIL OPENNESS PAYROLL TAXES POLICY MAKERS PROCESS OF CONVERGENCE PRODUCTIVITY PROPERTY RIGHTS PROPERTY TAXES PROVISIONS PUBLIC FINANCE PUBLIC GOODS PUBLIC SECTOR QUANTITATIVE RESTRICTIONS QUOTAS REAL INCOME REDUCTION IN TARIFFS RULES OF ORIGIN SUBNATIONAL GOVERNMENTS TAX TAX COLLECTION TAX INCENTIVES TAX RATES TAX REFORM TAX REFORMS TAX REVENUES TAX SUBSIDIES TAX SYSTEMS TAXATION TIME SERIES TOTAL OUTPUT TRADE AGREEMENT TRADE PARTNERS TRADE PATTERNS TRADE POLICY UNIFORM TAXES VALUE ADDED VALUE OF EXPORTS WAGES WELFARE LOSS NORTH AMERICAN FREE TRADE AGREEMENT The North American Free Trade Agreement (NAFTA) has had a profound impact on Mexico's economy and institutions. Clearly, no consideration of tax reform can ignore its role. The thinking about tax reform in Mexico requires evaluating NAFTA's effect on Mexico's economy, including its tax structure, and the effects of its tax system on trade and capital flows between Mexico and its NAFTA partners, the United States and Canada. The authors review the evidence on NAFTA's economic effects, focusing on the changes in foreign trade and foreign direct investment flows in Mexico and the effects of these changes on Mexico's tax base and ability to raise tax revenues. Using marginal effective tax rate analysis, the authors also compare Mexico's tax system with those of Canada and the United States in terms of the effect on foreign direct investment. The authors draw two main conclusions from their analysis. First, by fueling Mexico's exports and foreign direct investment inflows, NAFTA has altered the country's economic structure and hence the industrial distribution of the tax base. This transformation calls for adapting the tax structure to an economy oriented toward services and manufacturing exports. And second, Mexico's membership in NAFTA provides no significant reasons for fundamental change in its tax structure. The new wave of tax reform should concentrate on raising revenues, simplifying the tax structure, and increasing the efficiency and overall equity of the tax system. 2014-08-20T21:11:57Z 2014-08-20T21:11:57Z 2001-09 http://documents.worldbank.org/curated/en/2001/09/1574607/impact-nafta-options-tax-reform-mexico https://hdl.handle.net/10986/19536 English en_US Policy Research Working Paper;No. 2669 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ application/pdf text/plain World Bank, Washington, DC |
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Banco Mundial |
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Estados Unidos |
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US |
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Bibliográfico |
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En linea |
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dig-okr |
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biblioteca |
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America del Norte |
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Biblioteca del Banco Mundial |
| language |
English en_US |
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ACCOUNTING AGRICULTURE APPAREL ARBITRAGE BORDER TRADE CAPITAL FLOWS CAPITAL GOODS COMMODITIES COMPETITIVE ADVANTAGE CORPORATE INCOME TAX CORPORATE INCOME TAXES DEVALUATION DIVIDENDS DOMESTIC DEMAND DUMPING ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC EFFECTS ECONOMIC GROWTH ECONOMIC IMPACT ECONOMIC INTEGRATION ECONOMIC LIBERALIZATION ECONOMIC SECTORS ECONOMIC STRUCTURE EMPLOYMENT ENERGY TAXES ENGINE OF GROWTH EXCHANGE RATE EXCHANGE RATES EXPORT GROWTH EXPORT MARKETS EXPORT SECTORS EXPORTERS EXPORTS FOREIGN COMPETITION FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN GOODS FOREIGN INVESTMENT FOREIGN INVESTMENT LAW FOREIGN INVESTOR FOREIGN INVESTORS FOREIGN OWNERSHIP FOREIGN TRADE FORESTRY FREE MOBILITY OF LABOR FREE TRADE FREE TRADE AREA GATT GDP GOVERNMENT EXPENDITURES IMPORT DUTIES IMPORT DUTY IMPORTS INCOME INCOME DISTRIBUTION INCOME TAXES INDUSTRIAL SECTOR INFLATION INSURANCE INTELLECTUAL PROPERTY RIGHTS INTERMEDIATE INPUTS INVENTORIES INVESTMENT FLOWS INVESTMENT LIBERALIZATION LOCAL GOVERNMENTS MACROECONOMIC ADJUSTMENT MACROECONOMIC INSTABILITY MULTINATIONAL FIRMS NATIONAL TAXES OIL OPENNESS PAYROLL TAXES POLICY MAKERS PROCESS OF CONVERGENCE PRODUCTIVITY PROPERTY RIGHTS PROPERTY TAXES PROVISIONS PUBLIC FINANCE PUBLIC GOODS PUBLIC SECTOR QUANTITATIVE RESTRICTIONS QUOTAS REAL INCOME REDUCTION IN TARIFFS RULES OF ORIGIN SUBNATIONAL GOVERNMENTS TAX TAX COLLECTION TAX INCENTIVES TAX RATES TAX REFORM TAX REFORMS TAX REVENUES TAX SUBSIDIES TAX SYSTEMS TAXATION TIME SERIES TOTAL OUTPUT TRADE AGREEMENT TRADE PARTNERS TRADE PATTERNS TRADE POLICY UNIFORM TAXES VALUE ADDED VALUE OF EXPORTS WAGES WELFARE LOSS NORTH AMERICAN FREE TRADE AGREEMENT ACCOUNTING AGRICULTURE APPAREL ARBITRAGE BORDER TRADE CAPITAL FLOWS CAPITAL GOODS COMMODITIES COMPETITIVE ADVANTAGE CORPORATE INCOME TAX CORPORATE INCOME TAXES DEVALUATION DIVIDENDS DOMESTIC DEMAND DUMPING ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC EFFECTS ECONOMIC GROWTH ECONOMIC IMPACT ECONOMIC INTEGRATION ECONOMIC LIBERALIZATION ECONOMIC SECTORS ECONOMIC STRUCTURE EMPLOYMENT ENERGY TAXES ENGINE OF GROWTH EXCHANGE RATE EXCHANGE RATES EXPORT GROWTH EXPORT MARKETS EXPORT SECTORS EXPORTERS EXPORTS FOREIGN COMPETITION FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN GOODS FOREIGN INVESTMENT FOREIGN INVESTMENT LAW FOREIGN INVESTOR FOREIGN INVESTORS FOREIGN OWNERSHIP FOREIGN TRADE FORESTRY FREE MOBILITY OF LABOR FREE TRADE FREE TRADE AREA GATT GDP GOVERNMENT EXPENDITURES IMPORT DUTIES IMPORT DUTY IMPORTS INCOME INCOME DISTRIBUTION INCOME TAXES INDUSTRIAL SECTOR INFLATION INSURANCE INTELLECTUAL PROPERTY RIGHTS INTERMEDIATE INPUTS INVENTORIES INVESTMENT FLOWS INVESTMENT LIBERALIZATION LOCAL GOVERNMENTS MACROECONOMIC ADJUSTMENT MACROECONOMIC INSTABILITY MULTINATIONAL FIRMS NATIONAL TAXES OIL OPENNESS PAYROLL TAXES POLICY MAKERS PROCESS OF CONVERGENCE PRODUCTIVITY PROPERTY RIGHTS PROPERTY TAXES PROVISIONS PUBLIC FINANCE PUBLIC GOODS PUBLIC SECTOR QUANTITATIVE RESTRICTIONS QUOTAS REAL INCOME REDUCTION IN TARIFFS RULES OF ORIGIN SUBNATIONAL GOVERNMENTS TAX TAX COLLECTION TAX INCENTIVES TAX RATES TAX REFORM TAX REFORMS TAX REVENUES TAX SUBSIDIES TAX SYSTEMS TAXATION TIME SERIES TOTAL OUTPUT TRADE AGREEMENT TRADE PARTNERS TRADE PATTERNS TRADE POLICY UNIFORM TAXES VALUE ADDED VALUE OF EXPORTS WAGES WELFARE LOSS NORTH AMERICAN FREE TRADE AGREEMENT |
| spellingShingle |
ACCOUNTING AGRICULTURE APPAREL ARBITRAGE BORDER TRADE CAPITAL FLOWS CAPITAL GOODS COMMODITIES COMPETITIVE ADVANTAGE CORPORATE INCOME TAX CORPORATE INCOME TAXES DEVALUATION DIVIDENDS DOMESTIC DEMAND DUMPING ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC EFFECTS ECONOMIC GROWTH ECONOMIC IMPACT ECONOMIC INTEGRATION ECONOMIC LIBERALIZATION ECONOMIC SECTORS ECONOMIC STRUCTURE EMPLOYMENT ENERGY TAXES ENGINE OF GROWTH EXCHANGE RATE EXCHANGE RATES EXPORT GROWTH EXPORT MARKETS EXPORT SECTORS EXPORTERS EXPORTS FOREIGN COMPETITION FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN GOODS FOREIGN INVESTMENT FOREIGN INVESTMENT LAW FOREIGN INVESTOR FOREIGN INVESTORS FOREIGN OWNERSHIP FOREIGN TRADE FORESTRY FREE MOBILITY OF LABOR FREE TRADE FREE TRADE AREA GATT GDP GOVERNMENT EXPENDITURES IMPORT DUTIES IMPORT DUTY IMPORTS INCOME INCOME DISTRIBUTION INCOME TAXES INDUSTRIAL SECTOR INFLATION INSURANCE INTELLECTUAL PROPERTY RIGHTS INTERMEDIATE INPUTS INVENTORIES INVESTMENT FLOWS INVESTMENT LIBERALIZATION LOCAL GOVERNMENTS MACROECONOMIC ADJUSTMENT MACROECONOMIC INSTABILITY MULTINATIONAL FIRMS NATIONAL TAXES OIL OPENNESS PAYROLL TAXES POLICY MAKERS PROCESS OF CONVERGENCE PRODUCTIVITY PROPERTY RIGHTS PROPERTY TAXES PROVISIONS PUBLIC FINANCE PUBLIC GOODS PUBLIC SECTOR QUANTITATIVE RESTRICTIONS QUOTAS REAL INCOME REDUCTION IN TARIFFS RULES OF ORIGIN SUBNATIONAL GOVERNMENTS TAX TAX COLLECTION TAX INCENTIVES TAX RATES TAX REFORM TAX REFORMS TAX REVENUES TAX SUBSIDIES TAX SYSTEMS TAXATION TIME SERIES TOTAL OUTPUT TRADE AGREEMENT TRADE PARTNERS TRADE PATTERNS TRADE POLICY UNIFORM TAXES VALUE ADDED VALUE OF EXPORTS WAGES WELFARE LOSS NORTH AMERICAN FREE TRADE AGREEMENT ACCOUNTING AGRICULTURE APPAREL ARBITRAGE BORDER TRADE CAPITAL FLOWS CAPITAL GOODS COMMODITIES COMPETITIVE ADVANTAGE CORPORATE INCOME TAX CORPORATE INCOME TAXES DEVALUATION DIVIDENDS DOMESTIC DEMAND DUMPING ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC EFFECTS ECONOMIC GROWTH ECONOMIC IMPACT ECONOMIC INTEGRATION ECONOMIC LIBERALIZATION ECONOMIC SECTORS ECONOMIC STRUCTURE EMPLOYMENT ENERGY TAXES ENGINE OF GROWTH EXCHANGE RATE EXCHANGE RATES EXPORT GROWTH EXPORT MARKETS EXPORT SECTORS EXPORTERS EXPORTS FOREIGN COMPETITION FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN GOODS FOREIGN INVESTMENT FOREIGN INVESTMENT LAW FOREIGN INVESTOR FOREIGN INVESTORS FOREIGN OWNERSHIP FOREIGN TRADE FORESTRY FREE MOBILITY OF LABOR FREE TRADE FREE TRADE AREA GATT GDP GOVERNMENT EXPENDITURES IMPORT DUTIES IMPORT DUTY IMPORTS INCOME INCOME DISTRIBUTION INCOME TAXES INDUSTRIAL SECTOR INFLATION INSURANCE INTELLECTUAL PROPERTY RIGHTS INTERMEDIATE INPUTS INVENTORIES INVESTMENT FLOWS INVESTMENT LIBERALIZATION LOCAL GOVERNMENTS MACROECONOMIC ADJUSTMENT MACROECONOMIC INSTABILITY MULTINATIONAL FIRMS NATIONAL TAXES OIL OPENNESS PAYROLL TAXES POLICY MAKERS PROCESS OF CONVERGENCE PRODUCTIVITY PROPERTY RIGHTS PROPERTY TAXES PROVISIONS PUBLIC FINANCE PUBLIC GOODS PUBLIC SECTOR QUANTITATIVE RESTRICTIONS QUOTAS REAL INCOME REDUCTION IN TARIFFS RULES OF ORIGIN SUBNATIONAL GOVERNMENTS TAX TAX COLLECTION TAX INCENTIVES TAX RATES TAX REFORM TAX REFORMS TAX REVENUES TAX SUBSIDIES TAX SYSTEMS TAXATION TIME SERIES TOTAL OUTPUT TRADE AGREEMENT TRADE PARTNERS TRADE PATTERNS TRADE POLICY UNIFORM TAXES VALUE ADDED VALUE OF EXPORTS WAGES WELFARE LOSS NORTH AMERICAN FREE TRADE AGREEMENT Martinez-Vazquez, Jorge Chen, Duanjie The Impact of NAFTA and Options for Tax Reform in Mexico |
| description |
The North American Free Trade Agreement
(NAFTA) has had a profound impact on Mexico's economy
and institutions. Clearly, no consideration of tax reform
can ignore its role. The thinking about tax reform in Mexico
requires evaluating NAFTA's effect on Mexico's
economy, including its tax structure, and the effects of its
tax system on trade and capital flows between Mexico and its
NAFTA partners, the United States and Canada. The authors
review the evidence on NAFTA's economic effects,
focusing on the changes in foreign trade and foreign direct
investment flows in Mexico and the effects of these changes
on Mexico's tax base and ability to raise tax revenues.
Using marginal effective tax rate analysis, the authors also
compare Mexico's tax system with those of Canada and
the United States in terms of the effect on foreign direct
investment. The authors draw two main conclusions from their
analysis. First, by fueling Mexico's exports and
foreign direct investment inflows, NAFTA has altered the
country's economic structure and hence the industrial
distribution of the tax base. This transformation calls for
adapting the tax structure to an economy oriented toward
services and manufacturing exports. And second,
Mexico's membership in NAFTA provides no significant
reasons for fundamental change in its tax structure. The new
wave of tax reform should concentrate on raising revenues,
simplifying the tax structure, and increasing the efficiency
and overall equity of the tax system. |
| topic_facet |
ACCOUNTING AGRICULTURE APPAREL ARBITRAGE BORDER TRADE CAPITAL FLOWS CAPITAL GOODS COMMODITIES COMPETITIVE ADVANTAGE CORPORATE INCOME TAX CORPORATE INCOME TAXES DEVALUATION DIVIDENDS DOMESTIC DEMAND DUMPING ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC EFFECTS ECONOMIC GROWTH ECONOMIC IMPACT ECONOMIC INTEGRATION ECONOMIC LIBERALIZATION ECONOMIC SECTORS ECONOMIC STRUCTURE EMPLOYMENT ENERGY TAXES ENGINE OF GROWTH EXCHANGE RATE EXCHANGE RATES EXPORT GROWTH EXPORT MARKETS EXPORT SECTORS EXPORTERS EXPORTS FOREIGN COMPETITION FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN GOODS FOREIGN INVESTMENT FOREIGN INVESTMENT LAW FOREIGN INVESTOR FOREIGN INVESTORS FOREIGN OWNERSHIP FOREIGN TRADE FORESTRY FREE MOBILITY OF LABOR FREE TRADE FREE TRADE AREA GATT GDP GOVERNMENT EXPENDITURES IMPORT DUTIES IMPORT DUTY IMPORTS INCOME INCOME DISTRIBUTION INCOME TAXES INDUSTRIAL SECTOR INFLATION INSURANCE INTELLECTUAL PROPERTY RIGHTS INTERMEDIATE INPUTS INVENTORIES INVESTMENT FLOWS INVESTMENT LIBERALIZATION LOCAL GOVERNMENTS MACROECONOMIC ADJUSTMENT MACROECONOMIC INSTABILITY MULTINATIONAL FIRMS NATIONAL TAXES OIL OPENNESS PAYROLL TAXES POLICY MAKERS PROCESS OF CONVERGENCE PRODUCTIVITY PROPERTY RIGHTS PROPERTY TAXES PROVISIONS PUBLIC FINANCE PUBLIC GOODS PUBLIC SECTOR QUANTITATIVE RESTRICTIONS QUOTAS REAL INCOME REDUCTION IN TARIFFS RULES OF ORIGIN SUBNATIONAL GOVERNMENTS TAX TAX COLLECTION TAX INCENTIVES TAX RATES TAX REFORM TAX REFORMS TAX REVENUES TAX SUBSIDIES TAX SYSTEMS TAXATION TIME SERIES TOTAL OUTPUT TRADE AGREEMENT TRADE PARTNERS TRADE PATTERNS TRADE POLICY UNIFORM TAXES VALUE ADDED VALUE OF EXPORTS WAGES WELFARE LOSS NORTH AMERICAN FREE TRADE AGREEMENT |
| author |
Martinez-Vazquez, Jorge Chen, Duanjie |
| author_facet |
Martinez-Vazquez, Jorge Chen, Duanjie |
| author_sort |
Martinez-Vazquez, Jorge |
| title |
The Impact of NAFTA and Options for Tax Reform in Mexico |
| title_short |
The Impact of NAFTA and Options for Tax Reform in Mexico |
| title_full |
The Impact of NAFTA and Options for Tax Reform in Mexico |
| title_fullStr |
The Impact of NAFTA and Options for Tax Reform in Mexico |
| title_full_unstemmed |
The Impact of NAFTA and Options for Tax Reform in Mexico |
| title_sort |
impact of nafta and options for tax reform in mexico |
| publisher |
World Bank, Washington, DC |
| publishDate |
2001-09 |
| url |
http://documents.worldbank.org/curated/en/2001/09/1574607/impact-nafta-options-tax-reform-mexico https://hdl.handle.net/10986/19536 |
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AT martinezvazquezjorge theimpactofnaftaandoptionsfortaxreforminmexico AT chenduanjie theimpactofnaftaandoptionsfortaxreforminmexico AT martinezvazquezjorge impactofnaftaandoptionsfortaxreforminmexico AT chenduanjie impactofnaftaandoptionsfortaxreforminmexico |
| _version_ |
1807158137900236800 |