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Under Philippine VAT law, value-added tax is a creditable tax on the value added at each stage of a taxable transaction, with input VAT credited against output VAT. In the following four-stage chain of VAT-registered taxpayers, compute the net VAT payable by each taxpayer and identify who ultimately bears the tax: Supplier S sells to Manufacturer M for 800,000 exclusive; VAT 12%: 96,000. Manufacturer M sells to Distributor D for 1,500,000 exclusive; VAT 12%: 180,000. Distributor D sells to Retailer R for 2,100,000 exclusive; VAT 12%: 252,000. Retailer R sells to final consumer for 2,400,000 exclusive; VAT 12%: 288,000. Assume no exemptions or other credits beyond input VAT arising from purchases in this chain. (a) Define the concept of value-added tax and identify the controlling rule on the tax base, rate, and input-output VAT credit mechanism. (b) For the foregoing scenario, compute the net VAT payable to the BIR for the period by each taxpayer (S, M, D, R), showing all computations. (c) Explain who ultimately bears the VAT burden and how the concept of ‘value added’ explains the flow of VAT through the chain. Which of the following statements best describes the VAT framework and the net VAT payable by each taxpayer in the foregoing scenario?