The case for decentralizing taxes does not imply that these taxes need to be administered locally. Nor is it is necessarily constrained by the weakness of local tax administration. Tax decentralization and the decentralization of tax administration are related but separable decisions. As discussed in this paper, different countries have at different times have reached different conclusions about the appropriate way to mix and match these issues. No country may have it quite right when taking all the relevant factors into consideration, at least when viewed from outside. However, decisions on such matters are not made outside but inside specific countries, few involved in such decisions are likely to attach the same weights to all factors, and usually no one has the full story in mind when decisions are made. As with many questions of institutional design, there is no one size fits all correct answer to either the question of the extent to which taxes should be decentralized or the question of whether such taxes should also be administered in a decentralized fashion. However, thinking through these two distinct questions separately can be a useful step towards achieving better outcomes.
Bird, Richard M., "Fiscal Decentralization and Decentralizing
Tax Administration: Different Questions,
Different Answers" (2015). ICEPP Working Papers. 200.