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on the Agricultural Sector3. Beside, in these three cases is assumed absence of sales directed abroad (international trade), so goods must be only sold in the internal market. Three stages are defined:

STAGE I: includes all activities linked to land labors – corn production, agricultural activities for cattle feeding and care – as the use of fertilizers, disease vacuums, gasoline, etc.

STAGE II: including corn recollection or cattle reproduction and animal feeding, depending on the good.

STAGE III: trading, for intermediate demands (wholesalers) and retail sales to consumers (retailers).

First, the example of Corn is presented (Case 1); second, the Meat case (Case 2), and, finally, the consolidated of both activities (Case 3) that represents a simplified version of the Agricultural Sector. Tables show the following columns:

PV: production value (equivalent to sale values in both versions, with and without VAT. IC: input values (or intermediate consumption). VA: value added. T: tax revenue, with tax rate (t) levied uniformly in all stages, except for Stage I. That is: Stage I: IC: t = 20%; PV: t = 10%. Stage II and Stage III: t = 10%. TB: tax burden on value added. 4

Details about the calculus are shown in foot notes of Table 1, details that will be not repeated in next tables. In all tables can be observed the calculus of the “Addition VAT” modality - defined as the tax that levies the gross value added produced in each stage and assigned to factor of production employed in each stage - and the “Invoice” or “Fiscal Credit” VAT system, applied in Argentina and in most VAT legislations of the rest of the world, that levies the total value added accumulated in each stage (fiscal liability) allowing the deduction of the VAT charged in input invoices (fiscal credit). Finally, as it is systematically repeated at the bottom of each table, figures were simplified not considering decimals, except in few situations referred to tax burden coefficients (TB).

As can be seen in the example of Case 1 (Corn), TB – that result from simulation in all production stages is 10%, except in Sage I (8%). The final result is 9%. In the table it is included two columns for PV; one corresponding to sale price with VAT included (column [1a]) and the other with VAT excluded (column [1b]). The first one identifies the final sale price that consumers or households pay including the VAT accumulated in all stages, and also including the VAT corresponding to input purchases. The second column corresponds to the production values excluding the VAT, that is all VA accumulated at each stage.

3 See for example the methodology used in tax burden estimations by product and by region in AACREA (2005) and the study of Prosap-Banco Mundial (2004), following recommendations of national accounting methodology.

4 Tax rates used here are close to tax rates fixed by the Argentine VAT law for the Agricultural Sector (21% in certain inputs of Stage I and 10,5% in sector sales) and were chosen just for simplification.

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