Measuring the Efficiency of Tax Collection among Economic Sectors in Paraíba State Northeastern Brazil (2013-2015)

  •  Rodrigo Pereira de Oliveira    
  •  Bruno Ferreira Frascaroli    


This study investigates the efficiency of tax collection on operations related to the circulation of goods and interstate services (ICMS) in far east of Brazil, Paraíba State. The efficiency was estimated using quarterly data of the electronic invoices from the period of January 2013 to December 2015. In addition, we aim to identify levy’s key factors among distinct sectors, disaggregated into 489 sub-classes, according to the national classification of economic activities. It was used a stochastic frontier analysis which suggests that the average of the technical efficiency of the tax collection among sectors was 73.75% of the potential tax revenues. The amount of uncollected tax during the studied period were approximately US$7 billion. There is technical inefficiency of tax levy among important sectors of the economy of the state of Paraíba, demonstrated by 88.88% of inefficiency of tax collection itself. The sector comprehends clothing, wholesale of personal care products and leather shoes, among others. We verify that an increase of oversight actions by the tax collection agency helps to inhibit the inefficiency of tax levy.

This work is licensed under a Creative Commons Attribution 4.0 License.