“VAT Incidence, Tax on Exports and the Measurement of Tax Burden on Tradable Goods: the Agricultural Sector Case”

This paper analyzes conceptual issues dealing with the measurement of “sector tax burden”, specifically the methodological treatment of the Value Added Tax (VAT) and Tax on Exports, with particular reference to the Agricultural Sector. First, notions of tax impact (statutory or legal incidence), tax burden shifting and economic incidence of VAT applied to domestic goods are considered; second, the case of commercial (tradable) goods or commodities, which is the relevant case for Agricultural Sector. In this last case, Tax on Exports is also taken into account. Conclusions lead to recommend changes to the usual estimation of sector tax burden, which is considered wrong or at least incomplete in its treatment