Co-op leaders, BIR form TWG to streamline tax exemptions
For the first time in recent memory, officials of the Bureau of Internal Revenue (BIR) – the government agency for tax collection –on December 9 had formal talks with co-operatives on how to ease or facilitate the procedures in obtaining the Certificate of Tax Exemption (CTE).
This is the result of a series of meetings between the co-op sector and Bureau of Internal Revenue (BIR) officials beginning on November 5 in the House of Representatives and then on November 27 at the BIR Headquarters in Quezon City.
The November 5 meeting was organized and presided by COOP-NATCO Representative Sabiniano Canama, together with AGAP and APEC Partylist Representatives. Participants in the meeting numbered more than 100, comprising BIR officials headed by Atty. Marissa Cabreros of the Legal Group, Cooperative Development Authority officials headed by Chairperson Orlando Ravanera, primary cooperative leaders, and co-op federations NATCCO Network, Philippine Federation of Credit Cooperatives, Philippine Cooperative Center (PCC), VICTO in Visayas, MASS-SPECC in Mindanao, and NORLU in Northern Luzon.
Former Cebu Congressman Pablo Garcia began the discussions by giving a history of the tax exemptions of co-ops from RA 6938 in 1990 all the way to RA 9520 in 2008. He cited the case of Dumaguete Cathedral Credit Co-operative, whose tax case dragged on for years reaching all the way to the Supreme Court and was decided in favor of the co-op in 2010.
Co-op leaders took turns relating their difficulties in meeting BIR requirements like submitting list of members, and especially their respective Tax Identification Numbers (TIN), and more.
The TIN, in particular, was considered very difficult especially for co-ops with thousands of members who are from the poor sector
Atty. Cabreros of the BIR listed down the requirements for co-ops applying for Certificate of Tax Exemption and explained that those were part of their regulatory tasks. She then pointed out that these have been cascaded to BIR’s regional officials and the CDA. Further, the problem could be with CDA which probably had not cascaded it to the primary co-ops. (See related article on page 1)
On November 27, co-op leaders from the National Market Vendors Cooperative Federation, Bulacan Federation of Cooperatives, VICTO, Nueva Segovia Consortium of Cooperatives represented by former NATCCO Chairperson Divine Quemi, PCC, NATCCO Network, COOP-NATCCO Partylist, Tagum Cooperative and San Dionisio Credit Cooperative in Paranaque City met with BIR officials at the BIR headquarters.
The BIR officials were led by Assistant Commissioner Maria Luisa Belen and Legal Services OIC Atty. Larry Barcelo, and included Revenue Officers from Makati, Manila, Quezon City and Caloocan City.
Primary co-op leaders again lodged complaints on the difficulties in complying with BIR’s TIN requirement.
The BIR officials stood firm that they act within the requirements of the law, specifically the DOF-CDA-BIR Joint Administrative Order No. 1-2019 drafted by the DOF and the CDA, saying they “could be questioned if they do not implement the law.”
The co-op leaders suggested the possibility of primary co-ops issuing TINs to their members.
The BIR officials said it can authorize co-ops to issue TIN “basta paninindigan nila na hindi pekeng tao yun” (as long as co-ops can guarantee that the persons with the new TINs do exist). The co-op leaders assured that they would practice due diligence. BIR said it could be worked out in future discussions. Cielito Garrido of San Dionisio Credit Cooperative in Paranaque City said members (the poor ones) are intimidated by the BIR, whereas if the co-op will assist them in getting TIN, they will not be intimidated. She emphasized that it will be a partnership between co-ops and the BIR.
Other co-op leaders insisted that they cannot insist on members to get a TIN, as many of them feel they do not need it. So it was agreed that only “active” members will be required to have TINs. The BIR asked for the definition of “active” and one of the leaders said members in good standing (MIGS) will be given TINs. The BIR refused to equate MIGS with “active”. Cielo Garrido, however, said co-ops must clean up their member lists and suggested that “active” means “transacting with the co-op in the last three years”.
The BIR clarified, however, that the discussions in the TWG cannot amend the laws, as that can only be done by Congress. What the TWG & BIR can do is relax or modify the procedures for the issuance of CTEs.
The PCC reported that the tax exemption requirements PCC is being required to meet is that for non-government organizations (NGOs). BIR said the matter will be standardized for co-ops and NGOs.
PCC CEO Edwin Bustillos submitted to BIR Commissioner Belen a list of co-ops with complaints.
The BIR is preparing the Citizens’ Charter that contains the step-by-step procedure and the processing time for the Certificate of Tax Exemption (CTE). BIR will standardize the procedures by December 6 deadline.
BIR also advises co-ops to immediately protest the tax assessment of BIR within 15 days because if not, then the co-op will have to pay the amount – and not even the BIR Main office can reverse that.
CDA’s Atty. Batonan said the CDA will issue a Citizen’s Charter on the CTE
By December 9, the BIR had formed its own TWG.
The Philippine Cooperative Center after its consultation with federations and unions among its affiliates and allies submitted the names of representatives of the cooperative sector that will comprise the NCR, Luzon, Visayas and Mindanao Clusters.
As of press time, the CDA has yet to submit the names of their representatives.
As to the National Technical Working Group it is composed of Officials from BIR (Main Office), Office of Congressman Ben Canama, the CDA and PCC-led co-ops.
Among the highlights of the meeting were: 1) Congressman Ben Canama will set a meeting together with DOF, BIR, CDA and PCC regarding the review of the JAO 1 2019; 2) Review and possibly amend JRR 2010, particularly Sections 8 and 10 (B) to align it with Article 61 of RA 9520; and 3) how to ease the implementation of RA 11364 Sec 14 on Registration for Tax Exemptions.
As of the second week of December, the BIR is to release a Revenue Special Order that will focus on how to effectively address the issues and concerns of the cooperative sector.