This opportunity could not have come in a more propitious time, because of what I perceive to be an urgent problem besetting Philippine cooperatives. A consequent urgent need to rally all of our cooperatives in the country and other like-minded groups and citizens to effect important significant changes in our policy.
This is important especially if we are truly accomplished. The 2020 Vision of International Cooperative Alliance (ICA)—a topic in your conference now—which aims that cooperatives become, the acknowledged leader in economic, social, and environmental sustainability. It is a big ask. It is a big goal. But why not? It is achievable.
Also you would like for the cooperatives to be, the model preferred by the people. This is important. The realization not only by those who are involved in the cooperative movement, but the rest of the country, that the cooperative is important. The cooperative movement is important. Not because we would like to make money out of the cooperative. Not only because it gives a voice to individuals who would not have a voice. Who would not have a say in the running of their lives, but because it is an important, it should become an important part of our economy. When we are talking of our economy, we talk about small to medium sized enterprises. That is exactly where cooperatives prosper.
We should make the cooperative, the fastest growing form of enterprise. I think that you have identified in your theme, three very important objectives that we who have been working in the cooperative movement for many years. I think that these are important objectives and they are objectives that are practical in a sense that they are in fact achievable.
The first one I would say is relatively simple especially if the industry is steered by idealistic, innovative and socially conscious cooperative leaders. Leaders who excel in their respective fields and who also have a good vision not only for the welfare of their members but for the whole country. What is important here is a constant emphasis on continuing education and training of cooperatives, especially in the best and effective industry practices, environmental responsibility, and cooperative governance, of course, under the guidance of the CDA.
Now this is of course, siguro recognized na ito na importante talaga ang training. Recognized talaga na iyung edukasyon. Ngunit kailangan natin ayusin ang sistema ng CDA para sa training. Gumaganda naman. Dahan-dahang gumaganda dahil marami tayong ibinabago sa charter ng CDA. Marami tayo binabago sa sistema nila. Sana nga iyung pagtraining, ay hindi na ganoon kahirap, hindi na ganoon kamahal dahil alam naman natin, lalo na iyung maliliit na kooperatiba na malayo ang pinanggagalingan ay namamahalan sila doon sa kanilang ibabayad. Pangalawa, mahirap tganggalin, kahit malayo silang pupuntahan. Kaya’t siguro ang gagawin natin ay gagawin natin organisasyon para sa training. Hindi lamang sa CDA, kung hindi puede na ioutsource sa iba’t-ibang mga universities at eskwelahan para naman iyung load. Kasi iyung CDA iilan lang ang kanilang mga trainor, iilan lang ang kanilang mga staff. Sana kapag naayos natin ang sistemang iyan magiging mas madali para sa atin. Lalo na iyung mga bagong cooperatives makatanggap ng training at makakuha.
The second and the third objectives are not quite as simple as that. Considering the circumstances, perhaps some people would say, para itong “Mission Impossible”.
But let’s understand the problem. Let us start with the State policy on our cooperatives. In essence, it is the will of the sovereign Filipino people that we should foster the creation and growth of cooperatives as a practical vehicle for promoting self-reliance and harnessing people power towards the attainment of economic development and social justice. Simply put, ibig sabihin, na kailangan maliwanag na maliwanag na napaka laking maitutulong ng kooperatiba para sa ating mga maliliit na enterprises. Para sa ating mga magsasaka. Para sa ating mga gustong magbukas ng SME. Lahat iyan ay dapat makita na ang kooperatiba ay talagang tumutulong. Unang-una diyan ay kailangan natin ipaliwanag sa ating mga kababayan kung ano ang kayang gawin ng kooperatiba.
Unfortunately, the importance and the value of the cooperative does not seem to be recognized by our government. Whereas before, malaki ang suporta at pagtanggap ng mga kooperatiba sa gobyerno. Ngayon, parang hindi gaano. Parang hindi masyadong itinutulak at pinapalaki at pinapaganda ang kooperatiba.
To achieve and accomplish this sovereign will, the law has granted, ito ang unang halimbawa, the law has granted to cooperatives tax exemptions and the other fiscal incentives under the Cooperative Act registered cooperatives that transact and deal exclusively with their own members are not “subject to any taxes and fees imposed under the internal revenue laws and other tax laws”.
Alam natin lahat iyun. (?) of things of less than ten million is not taxable. Paliwanag ko nga kay Kim Henares kung bakit ganon na lang. Hanggang ngayon hindi pa niya maintindihan kung ano iyung ibig sabihin. Kung ano-ano ang mga hinhinging mga paliwanag ay lagi kong sinasabi, huwag ka ng humingi ng paliwaang sa akin, basahin mo iyung batas. Nasa batas. Nakalagay doon tax exempt ang mga maliliit na kooperatiba. Syempre iyung mga malalaki at saka iyun ang nagtatransact doon sa general public at may side na negosyo, taxable iyun. Pero kung miyembro lang ang kadeal mo, bakita ka itatax? Iba ang interpretasyon ng ating kaibigan sa BIR.
Registered cooperatives that transact or deal with non-members or to the general public are granted some tax exemption and other privileges. Not a blanket tax exemption, like a smaller limited cooperative. The determinant factor as I said is the ten million retained earnings, but it is clear however, despite the fact that for all of us, when we read the Cooperative Code, maliwanag na maliwanag tax exempt ang kooperatiba.
It is clear that the government itself is getting in the way. Imbis na makatulong, sagabal pa. As evidenced by the policy and the acts of certain agencies of government that seem to ultimately defeat and frustrate this clearly stated sovereign will. Government, the BIR, is making it difficult for cooperatives to avail of tax exemptions, by discouraging and suffocating administrative procedures and requirements.
Lahat na siguro nabiktima na diyan. Pabalik-balik. Kung ano-anong dokumentasyon ang hinihingi. Imbis na kilalanin na ang kooperatiba ay tax exempt, kailangan pang patunayan sa BIR na tax exempt ka dahil kung accredited cooperative ka, hahanapin sayo iyung buong listahan, address at saka telephone number ng lahat ng miyembro. Pababalikin at pababalikin ka sa regional office ng ilang linggo. Sabihin ko naman sa inyo, kami nakikipag-usap kami kay Commissioner Henares, kay Kim Henares at pagkaharap namin, sabi niya, “oo totoo iyan, tanggap namin iyan. Sang-ayon kami na talagang tax exempt ang mga kooperatiba”. Pag kami ang kaharap. Pagkadating sa regional offices na ng BIR, iba na ang nagiging usapan. Hanggang ngayon, siguro ilang taon na namin paulit-ulit na sinasabi sa BIR, sinasabi sa mga regional offices, sa lahat ng masabihan namin sa gobyerno, sinasabihan namin na tax exempt ito. Pero pagkaharap kami, oo ng oo, patuloy pa rin ang kanilang ginagawa.
The current practice ngayon, bago makapag-avail ng tax exemptions, kailangan ma-issuehan kayo ng CTE. Pero bago iyun, kailangan din Certificate of Good Standing from the Cooperative Development Authority. Iyun, reasonable iyun na accredited kayo ng CDA. Subject of course to prior and faithful submission of certain documentary requirements, ito pa, by the cooperatives.
I am not in agreement, I have not been in agreement and have been opposing and trying to convince different members in the government that this is not the way the BIR should administer tax incentives. Anyway, it is the current practice. I cannot help, but express my dismay, because not only does this serve to defeat the beneficial purpose of the law, it also serves to cause a regression of all our cooperative development efforts.
There are 25,000 or so cooperatives registered now with the CDA, with 13 million members. Of these cooperatives, 91% are from the micro, small and medium categories. 9% of them are large cooperatives. Those that have been issued a Certificates of Good Standing by the CDA are about 11,600. The most depressing of these statistics is that only 6,295 of those have been issued a CTE by the BIR. Napipilitan sila magbayad, under protest nga, pero nagbabayad na. pero alam naman natin iyung mga maliliit na kooperatiba, kung mayroon mang profit margin, napakanipis. Kung mapipilitan kayo magbayad, kaya nga ginawang tax exempt, para mabigyan ng pagkakataon iyung mga maliliit na makasimula, makaahon man lang. Pagka mapipilitan pa silang magbayad ng tax, hindi na talaga makapagsimula. Hindi makakapag-ahon. Never kikita iyun. Hindi nauunawaan ang cooperative movement nitong gobyernong ito, kung hindi parang sinasabotahe pa.
This all means that cooperatives in the country get significantly reduced by 50% at every important milestone in their quest for tax-exempt status, from their registration all the way to their application for CTE.
Let us compare these with the figures sa SEC, Securities and Exchange Commission. There are 460,000 active corporations registered with the SEC; 92,000 are registered partnerships.
It’s not a good sign if we take into account the social justice objectives mandated by the Constitution and the Cooperative Code and the very reason that we campaign and endorse the cooperative movement. I cannot believe that despite the tax privileges under the law, the numbers of cooperatives still lie very far behind the numbers of corporations and partnerships.
Ang pinakamasaklap dito ay ang nakakatindig-balahibong paniniwala ng atin mismong BIR Commissioner na masama ang epekto ng Cooperative Code. Noon lamang nakalipas na budget hearing ng DOF ay sinabi niya na kesyo raw “kailangang pag-aralan ulit” at “ayusin kasi may diperensiya ‘ho iyong batas na iyan”, ang sabi niya sa Cooperative Code. Worse, the BIR Chief blamed the phenomenon of “cooperatization” or “making use of the cooperative law to circumvent labor law, to circumvent tax laws”.
Sino ba ang gumagawa ng ganyan? Nakita natin doon sa rice smuggling, nakita natin sa smuggling ng bawang, ng iba’t-ibang produkto na ginamit ang mga kooperatiba para nga masabi na tax exempt, para makapag-import kung ano-anong mga kalokohan ang ginawa.
Pero ang kooperatiba ba ang gumagawa niyan? Palagay ko hindi. Unang-una tignan natin. Anong porsiyento ng kooperatiba na nasangkot diyan sa ganyang klaseng activity? Napakaliit lamang. Tapos kung titignan naman natin hindi naman kasalanan ng cooperative movement iyun. Kasalanan siguro ng enforcement ng gobyerno, ng kanilang smuggling. Kasalanan ng Bureau of Customs kasi hindi nila binabantayan o kasi tumatanggap sila. Kaya kunwari na lang hindi nila alam iyung nakikita nila.
Hindi problema ng kooperatiba iyang sinasabi ni BIR Commissioner. Problema iyan ng Customs. Problema iyan ng Police. Problema iyan ng Department of Agriculture. Hindi ko alam kung bakit sinisisi ang mga kooperatiba.
Ano bang nangyari sa ating BIR? Tila nagdiyo-diyos-diyosan na si BIR Commissioner. Siya na ba ang sambayanang Pilipino, o ang boses ng Pilipinas sa Kongreso? Kung magsalita ay parang hawak niya ang kinabukasan ng buong bansa.
These were very telling yet disturbing statements from our tax collector. This is why I am of the belief that our cooperative movement is not being sufficiently nurtured and effectively developed, contrary to the intent of the law. In fact, no less than the CDA has made the stark observation that our cooperative sector remains “under-developed”.
Kasi naman ang CDA, ang gusto nila ay talagang itinutulak nila ang cooperative movement, ngunit wala silang nakukuhang suporta sa ating gobyerno. Kaya’t kahit na sa tiyaga nila, sa sipag nila, sa talagang kanilang paniniwala, na dapat gawing maganda ang cooperative movement, kulang ang kanilang tao, kulang ang kanilang facilities, kulang ang kanilang training, kulang ang lahat ng support na kailangan para maging malago at masigla ang cooperative movement.
The cooperative sector will continue to be under-developed kung tatanggaling mo nga lahat ng advantage na ibinibigay ng batas sa ating kooperatiba, bakit pa papasok sa kooperatba? Walang advantage, wala rin. Edi magtayo ka na lang ng negosyo, subukan mo na lang mag sari-sari store. Subukan mo na lang magtinda ng kung ano. Pero hindi maaari maging kooperatiba kung ganito ang gagawin. Mahirap talaga maging successful ang kooperatiba. Mayroon pa rin na nagiging matagumpay, ngunit mas mahirap na ang magiging trabaho ng mga manager at mas hihina ng husto ang cooperative movement.
It is a basic legal principle that being a species of social legislation, the Cooperative Code should be interpreted liberally in favor of cooperatives. That is a simple legal principle. It must be interpreted liberally in favor of cooperatives and strictly against the government. ibig sabihin, pagkaini-interpret ang batas, ang Cooperative Code, halimbawa pag ininterpret, dapat kung maaaring pagbigyan ang kooperatiba, dapat gawin nila. Iyan ang bigi sabihin- liberally interpreted. Pagka naman sinabi strictly interpreted against the government, kailangan by the book, batas ng gobyerno dahil nga ginawa natin ito para tumulong sa kooperatiba, hindi para pahirapan.
This means that the Government should tip the balance in favor of a magnanimous policy of social justice, and temper its otherwise highly instinctual nature to tax its subjects and to collect fees from its members. Let us remember that our Constitution clearly says that our rule of taxation should be equitable.
Our system of taxation should aid in the promotion and growth of our cooperatives, and should not stunt and arrest their development. In the cooperative sector, the power to tax is not the same as the power to destroy and should not be interpreted; thus, the government should not “kill the goose that lays the golden eggs”, to borrow the familiar words of our Supreme Court.
The CDA says that the reason behind the tightening of incentive system is the observation that our law is susceptible to exploitation by unscrupulous cooperatives to enter through the “backdoor of the business to get tax exemptions”.
For everyone’s information, in the Senate, we have uncovered the modus operandi of some criminal minds who have utilized farmers’ cooperatives as disguised smuggling entities for foreign-sourced rice and other agricultural products. But then again, this is not a sufficient reason to tighten our regulation of cooperatives. Kagaya ng sabi ko, hindi kasalanan ng kooperatiba iyan. Kasalanan ng Customs iyan. Kasalanan ng pulis. Kasalanan ng BIR. Hindi kooperatiba ang gumagawa nito. Hindi ang cooperative movement. Hindi ito ang hamon ng cooperative movement at kung titignan natin, sa libu-libo ng kooperatiba, ilan ang nasangkot diyan? Marami na ang sampu. Marami ng ang isang dosena. But then again, these are not reasons. As I said, these are not reasons to completely change our system because this is going to threaten and destroy our cooperative movement.
There is a familiar saying, there are only two things in life that are certain: death and taxes. Our cooperatives can definitely attest to the truth of this saying. Para bagang para sa kooperatiba, imbis na “win-win”, nagiging “lose-lose” ang sitwasyon; walang takas ang ating mga kooperatiba: “buwis” o “pagkalugi”.
Ang patakaran ngayon ay tila “TAX PA MORE!”, TAX PA MORE!” Malayang kolekta ng buwis, kulang-kulang naman at hindi nararamdaman ang serbisyo ng gobyerno. Kawawa naman ang ating kooperatiba. Kawawa naman ang taumbayan.
With illogical and strangulating fiscal measures threatening our cooperatives, what can we do to possibly make cooperatives the business model preferred by people and the fastest growing form of enterprise? Iyang sinabi kong dalawang objective, mukhang mas mahirap hangga’t maunawaan ng ating gobyerno kung ano ba talaga ang ibig sabihin ng cooperative movement.
This poses as a continuing challenge to the CDA to be the staunch vanguard of cooperatives, to ensure the meaningful implementation of the law and the Constitution. Despite its meager budget, the CDA should is brave just like the shepherd David who was pitted against Goliath, and whose flock was always threatened by hungry and rapacious wolves. We have to give credit to the CDA for doing the job that they manage to do with very, very little to work with.
This should also be a challenge and an opportunity to the leaders and managers of our cooperatives. You should be at the forefront and should never relent in the struggle to demand logical and commonsense implementation by the government of our incentive scheme and to attain tax-exempt status of our cooperatives in the entire country.
Aside from focus on business operation, equal focus should be also laid on learning the administrative procedures and establishing harmonious and professional ties with the CDA and hopefully also the BIR, with a view to smoothing and streamlining what is popularly perceived to be a difficult and exasperating process of securing tax exemption certificates.
I am hoping that we can count on the Cooperative International TEAMshop to be a strong, united and vocal advocacy group in the making of these tax incentives a reality on the ground, and ultimately to help strengthen and fortify our countrymen’s belief in the socio-economic potential and viability of cooperatives.
Magkaisa po tayong lahat. Magbigayan, at magtulungan. I exhort all cooperatives to always be united even in diversity, all in the name of a continued and productive operation that ultimately benefits its members. The disagreements and differences in opinions that put unity to the test can always be resolved through calm, sober, healthy, democratic exchange of views and dialogue amongst the organization.
Tulad po ninyo at ng buong sektor ng kooperatiba, pangarap ko rin na maabot ang 2020 Vision para sa mga kooperatiba. Sana po ay samahan ninyo ako sa aking misyon na ito, upang ang ating pangarap ay ating maabot at gawing isang ganap na katotohanan. Umaasa po ako sa inyong suporta.
So without further ado, I send my best wishes to the assembly. I hope that you have had and will continue to have a productive and meaningful general assembly, full of fun under the sun, dito sa sosyal na Boracay island.
Once again, congratulations! Mabuhay ang Cooperative International TEAMshop! Mabuhay ang lahat ng mga kooperatiba sa buong bansa!
Maraming salamat po at magandang hapon po sa inyong lahat!