Senator Ferdinand “Bongbong” R. Marcos, Jr. slammed the Bureau of Internal Revenue for “harassing” cooperatives by imposing unreasonable requirements before they could enjoy their tax-exempt status.
Marcos aired this sentiment during a joint congressional hearing, held in the Senate, on proposed amendments to the charter of the Cooperative Development Authority (CDA).
“We have been around the country and 80 percent of our discussions are complaints from different cooperatives saying why is the BIR harassing us when we are by law already tax exempt?” Marcos said.
He noted that while the law very clearly states that cooperatives duly registered with the CDA are tax exempt, the BIR still requires to submit various documents to prove they should be exempted from the payment of taxes.
“Do you realize the chaos that such policy has caused?” Marcos told officials of the Department of Finance who attended the hearing.
Marcos said the BIR policy is counter-productive to idea of promoting cooperativism in the country as it prevents many cooperatives from enjoying their tax exemption and eventually caused 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,” Marcos 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.”