Manila Standard Today - Marcos: BIR rules on co-ops chaotic

30 December 2013

By Macon Ramos-Araneta | Manila Standard Today

Featured-image-Manila-Standard-TodaySenator Ferdinand “Bongbong” Marcos Jr. slammed the Bureau of Internal Revenue for “harassing” cooperatives by imposing on them unreasonable requirements before they could enjoy tax-exempt status.

In a statement on Sunday, Marcos aired this sentiment on the proposed amendments to the charter of the Cooperative Development Authority.

“We have been around the country and 80 percent of our discussions are complaints from different cooperatives,” he said. “Why is the BIR harassing us when we are by law already tax exempt?” Marcos said, quoting the cooperatives.

He noted that while the law states that cooperatives duly registered with the CDA are tax exempt, the BIR still requires them to submit various documents to prove they should be exempted from taxes.

“Do you realize the chaos that such policy has caused?” Marcos said.

The Ilocano lawmaker said the BIR policy is counter-productive to the idea of promoting cooperativism in the country as it prevents many cooperatives from enjoying their tax exemption and cause them to fail.

“And I say that it is unreasonable because it is almost impossible for most of the cooperatives to comply with those new requirements,” he said.

DOF officials insisted that the BIR requirement is justified because some CDA-registered cooperatives may engage in activities not for the direct benefit of its members and for which they should be taxed.

Marcos said this is the reason for the existence of the CDA, which is to monitor the activities of cooperatives to find out if they are complying with the law and revoke their accreditation if they do not.

What makes matter worse, according to Marcos, is that unlike the CDA, which sends its people to monitor cooperatives, the BIR requires cooperatives to go to their BIR office and submit the required papers.

“First of all as a procedural matter, that is incorrect, because that assessment has already been made (by the CDA). As a practical matter, it does not work because it is far too much to ask the cooperatives to make that kind of presentation to the BIR,” Marcos stressed.

In the current 16th Congress, Marcos has filed Senate Bill 424, or “An Act Reorganizing the Cooperative Development Authority, Repealing for the Purpose Republic Act No. 6939, Creating the Cooperative Development Authority.”