International Journal of

ADVANCED AND APPLIED SCIENCES

EISSN: 2313-3724, Print ISSN: 2313-626X

Frequency: 12

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 Volume 12, Issue 10 (October 2025), Pages: 81-87

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 Original Research Paper

The effect of legal entropy on value-added tax in Mexico, 1978–2023

 Author(s): 

 Javier Moreno 1, Leovardo Mata 2, *, Jaime Humberto Beltrán 2, 3

 Affiliation(s):

  1Facultad de Ciencias Económicas y Empresariales, Universidad Panamericana, Ciudad de México, México
  2Facultad de Economía y Negocios, Universidad Anáhuac México, Huixquilucan, México
  3Subdirección de Posgrado e Investigación, Instituto Tecnológico Superior de Tantoyuca, Tecnológico Nacional de México, Veracruz, México

 Full text

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 * Corresponding Author. 

   Corresponding author's ORCID profile:  https://orcid.org/0000-0003-4713-5116

 Digital Object Identifier (DOI)

  https://doi.org/10.21833/ijaas.2025.10.010

 Abstract

This study investigates the relationship between legal entropy (LE) and value-added tax (VAT) in Mexico. Legal entropy is considered a measure of uncertainty or instability within the legal framework, which may influence tax collection and government revenues. To explore this relationship, the study employs a causality approach combined with an autoregressive distributed lag (ARDL) model to assess both short-term and long-term dynamics. The results indicate a unidirectional causal link running from LE to VAT, suggesting that changes in legal uncertainty directly affect tax performance. However, no long-run cointegration is found between the two variables, implying the absence of a stable equilibrium relationship over time. In the short term, a one percent increase in the entropy index is estimated to reduce VAT revenue by approximately 2.06 percent. These findings highlight the potential risks posed by legal uncertainty for fiscal stability and effective tax policy.

 © 2025 The Authors. Published by IASE.

 This is an open access article under the CC BY-NC-ND license ( http://creativecommons.org/licenses/by-nc-nd/4.0/).

 Keywords

 Legal entropy, Value-added tax, Granger causality, ARDL model, Cointegration

 Article history

 Received 12 April 2025, Received in revised form 12 September 2025, Accepted 19 September 2025

 Acknowledgment

No Acknowledgment. 

 Compliance with ethical standards

 Conflict of interest: The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

 Citation:

 Moreno J, Mata L, and Beltrán JH (2025). The effect of legal entropy on value-added tax in Mexico, 1978–2023. International Journal of Advanced and Applied Sciences, 12(10): 81-87

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 Figures

  Fig. 1  Fig. 2

 Tables

  Table 1  Table 2  Table 3  Table 4

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