Practice question
A wholesaler passes VAT to a registered retailer, which validly credits that input and sells to a household buyer. Counsel says economic burden must stop with the retailer because it first paid the wholesaler's VAT line. Which is best?
- The complete credit-and-resale chain must be considered; first payment of an input-tax line does not conclusively identify final burden.
- Only the first business recipient can ever bear or shift any cost.
- Input credits are prohibited in every resale chain.
- The household automatically becomes the wholesaler's statutory output-taxpayer.
- The retailer's credit makes the household purchase tax-exempt.
Legal references
- NIRC Sections57-58,105-106 and110: https://lawphil.net/statutes/repacts/ra1997/ra_8424_1997.html
- RA12023, current digital-services VAT and reverse-charge provisions: https://lawphil.net/statutes/repacts/ra2024/ra_12023_2024.html
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