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liability-fiscal credit mechanism of the tax that implies the cancellation of both flows (liabilities and fiscal credits) at the producer level once the good is purchased by consumers, and the assumption link to this argument of total forward translation of the tax burden along the production chain. So final payment of the gross liability incorporated in the invoice extended to final consumers or households would close the chain with zero producers’ net tax burden.

However, forward shifting assumption depends on market circumstances. It is different in case of domestic goods and in those of commodities or tradable goods. The consequences on tax revenue for the government and the effect on welfare of people involved in market transactions depend on supplies and demands price-elasticity.

The aim of any study on sector tax burden is to measure what the Government collects in taxes paid by the activity perform by the sector subject to measurement (in this case the Agricultural Sector), without trying to investigate who finally support the burden of taxes. That means that sector estimation of tax burden follows the approach suggested by the national accounting methodology that defined that burden estimation at the moment of the “impact or statutory burden” of the tax.

Seeking that objective in case of domestic goods - not tradable - the results of VAT statutory incidence and economic incidence have been explained using an imaginary example for the Agricultural Sector - defined as composed by the production of two goods or activities: corn and meat – and identifying four cases that contain different assumptions. The first four examples are devoted to non-tradable goods; three cases (1, 2 and 3) measure the tax burden in the good “Corn”, in the good “Meat” and the consolidated (Agricultural Sector), using the usual tax burden forward shifting assumption. The fourth example (Case 4) assumes partial forward tax burden shifting.

Though in case of VAT tax burden could be assigned to households by the reason already explained of economic incidence, it is clear that who pays the tax to the Government is the Agricultural Sector as legal or registered taxpayer, so methodology should applied strictly the “impact or statutory incidence” criterion, assigning the tax burden to the sector.

In case of tradable goods there is a particular situation. Dealing with this type of goods, the remaining three cases have been dedicated to them and simulated. In these situations the presence of Tax on Exports and VAT were analyzed. The intention of this combination, obviously deliberated, is to identify what is considered a usual failure of estimation of sector tax burden. While VAT is excluded from the estimation, it is usually computed the Tax on Exports revenue collected by the Customs Administration. However, this procedure doesn't contemplate the well-known fact that Tax on Exports implies a “tax on production”, because the reduction of the internal price is similar to introduce an equivalent additional cost in production. Tax Administration accounting, however, registers only a part of the value subtracted to the sector by that reduction of the price – the one collected by the Custom Administration in concept of Tax on Exports – while the rest of that “tax on production” doesn't appear in the calculus. Actually, that part of the tax finances a transfer or subsidy to the domestic demand. Following similar criteria of public accounting technique dealing with the concept “tax expenditure”, all impact of the tax and the corresponding subsidy (not only the net result or the difference) should be registered.

Observing the necessary coherence in the imputation of sector tax burden on tradable goods, that is, maintaining the logic of the “statutory incidence” approach applied in case

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