Cooperatives from all over the country are set to unite to object to the repeal of Articles 60 and 61 of the Philippine Cooperative Code of 2008, otherwise known as Republic Act 9510 that sought to delete the provisions granting cooperatives tax exemptions.
A Philippine Cooperative Center circular revealed that the gathering dubbed, “Simultaneous Show of Force (SSF)” is set to be held on Saturday, April 29, and aims to gather at least 10,000 participants.
It is spearheaded by PCC and in partnership with Cooperative Development Authority.
Guesting during the Kapehan sa Dabaw media forum on Monday at SM City Davao, CDA – Davao Extension Office Senior Cooperative Development Specialist Antonio C. Escobar said although the agency appreciates the fiscal strategy of the government, particularly the proposed bill, however, stressed on the principle of social justice on the repeal of the said articles.
The sector faces a great threat anew as the Congress under the Duterte administration is once again studying to put cooperatives under taxation through the repeal of the said articles.
It can be recalled that in September 2015, cooperative members were enjoined to wage a massive campaign to oppose the proposed bills on the Rationalization of Fiscal Investment Incentives or House Bill 2765 authored by House Representative Gabriel Luis Quisumbing and Senate Bill 2048 authored by Senator Loren Legarda which are still pending at the congress and the senate level.
Article 60 of RA 9520 states that “duly registered cooperatives under the Code which do not transact any business with non-members or the general public shall not be subject to any taxes and fees imposed under the in the internal laws or any other tax laws.”
Article 61 says that “cooperatives transacting business with both members and non-members shall not be subjected to tax on their transactions with members, including final taxes on members’ deposits and documentary tax.”
Article 61 of RA 9520 further says that “cooperatives with accumulated reserves and undivided net savings of not more than P10 million shall be exempt from all national, city, provincial, municipal and barangay taxes of whatever name and nature. Such cooperatives shall be exempt from customs duties, advance sales or compensating taxes on their importation.”
“So kung irepeal na sya, that is one provision that is included on the proposed bill, wala na’y kalainan ang cooperatives karon sa mga corporation and the partnership,” said Escobar.
Escobar added, more than 80 percent of the country’s cooperatives are Micro enterprises who will be directly affected by these articles.
“We don’t want that to happen because although indirectly, the cooperatives are the producers of the taxpayers. Because of these coops, we generate employment. We do not go the government to provide employment to its members,” said the CDA CDS.
In a position letter signed by PCC Chairperson Hamilcar T. Rutaquio, he said that based on 2015 data, the 9,826 Cooperatives with 7,369,325 Individual Members provide 463,789 Direct Employment and pay/withheld Taxes amounting to Php6,345,931,626.91.
He added the loans provided by these Cooperatives are used by their members to build, maintain or grow their own business. These micro-businesses, in turn, provide more employment and contribute to the government’s coffers in the form of income taxes and business taxes.
“Surely, cooperatives are tax generators rather than tax evaders,” stressed the PCC chair.
Based on 2015 data, the Interest on Share Capital and Patronage Refund of the Cooperatives amounted to Php 8,214,135,844.50 or Php 1,114.64 Per Individual Cooperative Member.
“If this measly amount shall be taken away by the proposed Tax Reform legislation, surely it goes against the Social Justice Principle and Poverty Alleviation pursuit of the bills,” said Rutaquio.
