Mobile money and real-time digital payment systems have reshaped financial intermediation and state capacity in emerging economies. This paper studies the fiscal consequences of Banco Central do Brasil’s instant payment platform Pix, launched in 2020 and rapidly adopted nationwide. We construct a novel municipality-year panel combining universe Pix transaction data with municipal finances (FINBRA), individual income tax records (IRPF), geographic characteristics (IBGE), and mobile network coverage. Exploiting cross-municipality variation in pre-existing mobile infrastructure as an instrument for Pix adoption, we estimate two-way fixed effects and complementary event-study and regression discontinuity models. Preliminary evidence indicates a positive relationship between Pix transactions per capita and growth in per capita tax revenues between 2019 and 2021. The findings suggest that low-cost, account-to-account digital payment systems can enhance revenue mobilization by expanding traceable transactions and strengthening fiscal transparency in developing economies.

This paper examines whether expanding high-speed mobile internet can increase tax revenue in developing countries. Using the staggered rollout of 3G and 4G infrastructure across Brazilian municipalities and an event study design, we find that mobile internet expansion leads to a persistent rise in income tax revenue, driven mainly by corporate income taxes. The results suggest that increased economic activity and firm formalization explain this effect. Overall, the findings highlight digital infrastructure investment as a tool to promote growth and strengthen fiscal capacity beyond traditional tax reforms.

We study the impact of Brazil’s introduction of a new legal status -- the Microempreendedor Individual (MEI), which simplifies registration and compliance -- on the creation of dynamic firms. We assemble a matched administrative dataset linking the firm registry (CNPJ) to the universe of formal employment records (RAIS), allowing us to identify founders and track firm outcomes. Leveraging industry-level MEI eligibility in a difference-in-differences design, we estimate causal effects on entry and growth. MEI increases the number of new formal entrepreneurs by 137% but initially reduces limited liability entry, consistent with substitution toward the lower-cost regime. The program also yields a net positive effect on job creation: the number of entrepreneurs who ever become employers rises by 22%, driven by newly created employer MEIs that more than offset fewer employer limited liability entrants. These findings suggest that simplified formalization can broaden the base of dynamic, job-generating firms.

This paper provides new evidence on size-based taxation under low enforcement and pervasive informality, common in developing-country settings. I study Brazil’s introduction of a large-scale regime for micro-businesses below a revenue cutoff that replaced all business taxes with a low, fixed monthly fee, greatly simplifying compliance. Business creation proves highly responsive to tax liabilities: the reform increased the number of formal firms by 43%. This expansion is driven mainly by entrepreneurs moving from the informal sector, not by firms switching from other formal tax systems, implying gains in current tax revenue. The results show that targeted small-business regimes can promote formalization by focusing on firms most likely to remain informal. I also develop and estimate a model that clarifies the welfare trade-offs of fixed-fee taxation and identifies sufficient statistics for policy evaluation. The model indicates the reform raised welfare, mainly because it eliminated compliance costs rather than because it lowered taxes.