Mga kahigalaan dinhi sa Dumaguete City, maayong buntag kaninyong tanan!
First of all, allow me to warmly greet the entire NEORUNCO family on the occasion of its 36th Annual General Assembly.
Daghang salamat. Dako kaayo nakung pagpasidungog ug kalipay nakahimamat ako kaninyo niining bililhong panagtigom.
(Thank you. It is an honor to join you in this important occasion.)
It is truly an honor to address the responsible officers and members of this multi-awarded cooperative union on this important occasion, where I am truly privileged to bear witness to a changing of the guards for the coming year.
The importance cannot be understated. As a firmly established union of like-minded cooperatives, you indeed have strong potential of effecting worthwhile changes in the overall legal environment wherein your own member-cooperatives operate, with the benefits naturally cascading down to the individual members and your own communities as well.
And for today, please allow me to talk precisely about a change that we desire in our regulatory system, which in fact has also been the subject of lengthy discussions in our hearings in the Senate.
It is about the tax exemptions of cooperatives. You see, with the way the matter of tax exemption of cooperatives is being handled, our government is perceived to be adopting a self-contradicting stance. On the one hand, our Constitution and our laws recognize the potential of cooperatives as engines of economic growth for the people and our country, by clearly providing for tax exemptions.
However, on the other hand, our taxation system seems to take a contrary course, making it difficult for cooperatives to avail of these tax exemptions, by strewing discouraging and suffocating administrative procedures and requirements.
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”. This is couched in very clear language, and there is no room for other interpretation.
Whereas, registered cooperatives that transact or deal with non-members or to the general public are granted limited tax exemption and other privileges, the extent of which is determined whether their “accumulated reserves and undivided net savings” go beyond P10,000,000.00 or not.
Now comes the sad part. The current practice is that before cooperatives can avail of the tax exemptions under the law, they must first be issued a Certificate of Tax Exemption (CTE) by the BIR. But before that, they must first secure a Certificate of Good Standing (CGS) from the Cooperative Development Authority (CDA), subject of course to prior and faithful submission of certain documentary requirements by the cooperatives.
I am not in total agreement with the way our BIR administers these tax incentives; but, anyway, that is the current practice. However, 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 the regression of all our cooperative development efforts.
First of all, there are about 23,600 cooperatives registered now with the CDA, 91% of which are from the micro, small and medium categories. Just 9% of them are large cooperatives. Those that have been issued Certificates of Good Standing by the CDA number about 11,600. And the most depressing of these statistics is that only some 6,295 of these cooperatives have been issued Certificates of Tax Exemption by the BIR.
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 tax exemption.
Let us compare these with the figures of the Securities and Exchange Commission (SEC). There are currently more than 460,000 active corporations registered with the SEC; while there are 92,000 registered partnerships.
If you ask me, this is not a good sign if we take into account the social justice objectives mandated by the Constitution and the Cooperative Code. I simply cannot believe that despite the tax privileges under the law, the numbers of cooperatives still dismally lag behind the numbers of corporations and partnerships.
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”.
However, this “under-development” of our cooperative sector is not due to the nature of the cooperatives per se, but rather to our own regulatory system that tends to undermine and discourage the formation and operation of cooperatives as business organizations.
It is a basic legal principle that being a species of social legislation, the Cooperative Code should always be interpreted LIBERALLY in favor of cooperatives, and STRICTLY against the government.
This means that the Government should tip the balance in favor of its magnanimous policy of social justice, and temper its otherwise highly instinctual nature to tax its subjects. 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 should NOT be used as a “POWER TO DESTROY”, and the government should NOT “kill the goose that lays the golden eggs”, to borrow the familiar words of our Supreme Court.
If I were to be asked, I want an ideal system of tax exemption for cooperatives that is “PASPAS” (fast), “SAYON” (easy), and “WALA NAY LANGAY-LANGAY” (no red-tape)!
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 of tax exemptions”.
For everybody’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, these are not sufficient reasons to altogether tighten our regulation of cooperatives, to the point of their asphyxiation or even total prohibition.
There is a familiar saying, there are only two things certain in life: death and taxes. Our cooperatives can definitely attest to the truth of this saying! Para bagang “lose-lose” situation; walang takas ang ating mga kooperatiba: “BUHIS” (tax) lamang o “NAPURDOY” (bankruptcy)!
Makalolo-uy nga kahimtang sa atong kooperatiba!
(Kawawa naman ang ating mga kooperatiba!)
This poses as a continuing challenge to our regulators—the CDA and the BIR—to improve our overall system and ensure the healthy development of the cooperative sector.
This should also be a challenge to the leaders and managers of our cooperatives, most especially to NEORUNCO. You should be at the forefront and should never relent in the struggle to demand logical implementation of our incentive scheme and to attain tax-exempt status of our cooperatives on this side of the country!
Aside from focus on business operations, equal focus should be laid on learning the administrative procedures and establishing harmonious and professional ties with the CDA and the BIR, with a view to smoothening and streamlining what is popularly perceived to be a difficult and exasperating process of securing tax exemption certificates.
Makakaasa kayo na ang inyong lingkod ay masugid na nakabantay at nakamatyag sa usapin na ito, upang ito ay mailagay sa ayos at mapakinabangang husto ng ating taumbayan.
And I am hoping that we can count on the Negros Oriental Union of Cooperatives to be a strong, united and vocal advocacy group in making these tax incentives under the law 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.
Magkahi-usa kitang tanan. Mag-inambitay, ug magtinabangay.
(Magkaisa po tayong lahat. Magbigayan, at magtulungan.)
The size of our group notwithstanding, in the end, all that we want is to pursue what is best for our member-cooperatives. The disagreements and differences in opinions that would stand in the way towards the pursuit of this objective could always be resolved through calm, sober, healthy and democratic exchange of views and dialogue amongst all of us.
So without further ado, I send all my best wishes to the Negros Oriental Union of Cooperatives. May you have a very inspired, orderly, productive and meaningful general assembly.
Paningkamutan natung tanan kutub sa atung mahimo aron molambo ang usag-usa kanato, apil na ang atung mga kooperatiba ug ang atung katilingban dinhi sa Negros Oriental!
(Let us do everything to advance the welfare not only of our members, but also our cooperatives and our communities here in Negros Oriental!)
Once again, congratulations on the occasion of your 36th Annual General Assembly!
Mabuhay ang Negros Oriental Union of Cooperatives (NEORUNCO)!
Padayon sa maayo ninyong binuhatan! Hinaot nga daghang pang umaabot pang mga katuigang!
(Keep up the good work! May you have many more years to come!)
Daghang salamat sa pagdapit kanako nga inyong solugoon.
(Muli po, maraming salamat sa pagkumbida sa inyong lingkod!)
Hangtud sa sunod natung paghibalag!
(Hanggang sa ating muling pagkikita!)
Maayong buntag kaninyong tanan!
(Good morning to everyone!)
Uswag Negros Oriental!
Daghang salamat kaninyong tanan, hinigugma kong mga taga-Dumaguete!
(Maraming salamat sa inyong lahat, mga mahal kong mga taga-Dumaguete!)