Case Study of Estimating VAT Base by Using Input-output Table

The Value Added Tax (VAT) is a kind of sales tax which is incurred by final consumers. In VAT System, the entire economic activities are considered the same and in order to prevent double and triple taxation, buying intermediate goods and services are exempted from VAT. This study attempts to explain a method for calculating VAT base by using a scientific method and reviewing a variety of external and internal studies which focus on modifying methods. Therefore, reviewing Mackenzie method which was used in 1991 for the first time, this paper estimated the VAT base in 1386 equal to 44% of the GDP.