BAGUIO CITY – The City Council approved a consolidated resolution strongly opposing the passage of any bill lifting the tax exemptions that are already being enjoyed by cooperatives under existing laws, rules and regulations.
The resolution authored by Vice mayor Edison R. Bilog and Councilor Arthur Alad-iw stated to repeal the tax exemption granted to cooperatives would actually defeat the primary objective of having the establishment of cooperatives and the intent of the 1987 Constitution mandating the creation of the Cooperative Development Authority (CDA) to advance the status of cooperatives in the countryside as a vehicle for socio-economic growth.
Section 15, Article 12 of the Constitution stated that it shall be the policy of the State to promote the viability and growth of cooperatives as instruments of equity, social justice and economic development.
The resolution added the local government being a cooperative-friendly LGU supported the vision, mission, and objectives of the cooperatives in the city, thus, it is against the enactment of any pending bill lifting the tax exemption privileges of cooperatives as it will greatly interrupt the growth of the cooperative sector and affect its members.
Under the provisions of Republic Act (9520) or the New Philippine Cooperative code which amended RA 6938, cooperatives with assets of not more than P10 million are exempted from all national, city, municipal or barangay taxes as well as from customs duties, advance sales or compensation taxes on their importation of machineries, equipment and spare parts used by them.
Pending before the Congress of the Philippines are proposed laws on the rationalization of fiscal investment incentives which seek to repeal Articles 60 and 61 of RA 9520 which extends cooperatives tax exemption privileges.
Based on data obtained from the CDA, the membership of cooperatives around the country reached over 14 million considering their desire to improve their economic lives by their own initiatives and by their own resources and they generate employment, produce taxpayers since the members who are also employees of the jobs generated are taxed of their income and they conduct their business activities not for profit but for the sustenance of its members.
Although cooperatives are taxed in various ways including education and trainings, the resolution noted there are pending bills on the realization of tax reforms that will remove the tax privileges of cooperatives.
Even if taxes are the lifeblood of the government, the resolution pointed out programs, policies should bow down to the principles of social justice as the repeal of the tax exemption would greatly affect those belonging under the micro, small enterprises which make up the 80 percent of the total number of cooperatives in the country and it will deprive members who are mostly poor of the only organization that knows their conditions and which provide them what they need.
The resolution claimed removing the tax exemption will dissuade the cooperatives in the country which are the prime movers of the country’s economy and who have significantly contributed to the fulfilment of the State’s mandate of alleviating the lives of the people from poverty. By Dexter A. See