Cooperatives to stay tax exempt: Luigi

Representative Luis Gabriel “Luigi” Quisumbing (Cebu 6th District) assured Cebu cooperative leaders that their tax exemption will continue even with the amendments of Republic Act 9520

Speaking during the membership meeting of the National Confederation of Cooperatives (NATCCO) Network at Sarrosa International Hotel, Quisumbing said he authored House Bill No. 2765 (Fiscal Incentives Bill) as proposed by the DOF

Sen. Loren Legarda filed the counterpart Senate Bill No. 2048

Rep. Cresente Paez of the Coop NATCCO Party-List said the bill became controversial when during the discussion in the House committee on ways and means chaired by Rep. Romero Quimbo, the repealing clause included the repeal of Articles 60 and 61 of RA9520, which granted tax exemptions

CDA 7 Director Deri said there are 230 cooperatives in Cebu City with over 195,000 members and 573 cooperatives in Cebu province with more than 245,000 members who will be affected by the repeal of the two provisions

In a separate tax forum held at the CFI Multipurpose Cooperative Building last Sept 17, former deputy house speaker Pablo Garcia and cooperative leaders criticized the quisumbing bill and senate bill 2048 because they will repeal articles 60 and 61 of RA9520, which granted tax exemptions to cooperatives

Garcia said cooperatives that are already recognized by the united nations must continue to enjoy tax exemption because they provide access to capital to ordinary Filipinos

But quisumbing told NATCCO leaders that he will make sure the provisions of RA9520 will not be repealed so cooperatives will continue to enjoy tax exemption

The congressman said his bill is intended to check if the incentives given by the government to industries, such as those in the export processing zone, are still relevant

“My bill is to strengthen industries while protecting important contributors to the economy such as cooperatives. I brought this up to the DOF and Quimbo and they assured me that the repealing clause on exemptions will be removed.” Quisumbing said

Quisumbing said he will make sure the removal of the repealing clause of cooperatives’ tax exemption will be part of the final version of the bill

“I am giving you my word, I will not allow this important sector and contributor to nation-building to suffer.” Quisumbing said

House Bill 2765 (An Act Rationalizing the Grant and Administration of Fiscal Incentives for the Promotion of Investments and Growth, and for Other Purposes – Rep. Gabriel Luigi Quisumbing)

Senate Bill 2048 (An Act Rationalizing the Grant and Administration of Fiscal Incentives for the Promotion of Investments and Growth, and for Other Purposes – Sen. Loren Legarda)

Sen. Aquino opposes removal of tax exemption to cooperativesMANILA (PNA) — Senator Paolo Benigno ‘Bam’ Aquino IV said on Thursday he is committed to oppose any move to remove tax exemption given to cooperatives.

Aquino made the assurance amid fears by cooperatives that the tax exemption granted to them by the Cooperative Code of the Philippines will be removed in the proposed Fiscal Incentives Rationalization Law.

“We will not allow that to happen. We will make sure the cooperatives retain their tax exemptions,” Aquino, chairman of the Senate Committee on Trade, Commerce and Entrepreneurship, said.

Instead of burdening them, Aquino said the government must give all the support small businesses need to prosper.

Aquino said he’s taking up the cudgels for cooperatives to continue the legacy of his late uncle Agapito “Butz” Aquino who, during his time as senator and congressman, pushed for the welfare of cooperatives in the country.

Considered as the father of modern cooperatives, Butz Aquino worked with the Philippine Cooperative Center as chairman until his death on August 17 of this year.

The Philippine Cooperative Center strongly opposes the repeal of Articles 60 and 61 of the Cooperative Code of the Philippines or Republic Act No. 9520, which aims to rescind the tax exemption privileges of cooperatives in the country.

R.A. 9520 gives cooperatives with assets of not more than PhP10 million exemption from all national, city, municipal or barangay taxes.

Cooperatives are also exempt from customs duties, advance sales or compensation taxes on their importation of machineries, equipment and spare parts used by them.

According to data from the Cooperative Development Authority, there are 24,652 registered cooperatives in the country as of December 2014, with over 13 million individual members.

FASTLANES: Co-ops awaken, to fight bills lifting tax exemptionQUEZON CITY (MindaNews / 3 Sept) – Leaders of cooperative federations meet here last Thursday to plan out actions on moves to abolish their privilege of tax exemption.

In a meeting called by the Philippine Cooperative Center (PCC) yesterday, leaders of cooperative federations from around the country agreed to campaign against provisions in the proposed law on the Rationalization of Fiscal Investment Incentives, now pending in the House of Representatives and the Senate.

The cooperatives are particularly wary on the provision of the proposed law that seeks to repeal sections 60 and 61 of the Cooperative Code of the Philippines (RA 9520). These provisions give cooperatives tax exemption privileges. Among the non-taxable income of cooperatives are those derived from business transactions with members.

Also cooperatives with assets of not more than P10 million are exempt from “all national, city, municipal or barangay taxes. They are also exempt from customs duties, advance sales or compensation taxes on their importation of machineries, equipment and spare parts used by them.”

The repeal of the tax exemption privileges of cooperatives according to Ponciano Payoyo, chairperson of the Philippine Federation of Electric Cooperatives (Philfeco) is misplaced and defeats the role of cooperatives.

Payoyo, former Apec party-list representative, said the proposed Fiscal Investment Incentives law should only cover investment promotions agencies, and the Cooperative Development Authority (CDA) is not among those.

The creation of the CDA is mandated in section 15, Article XII of the Constitution which says it is policy of the state “to promote the viability and growth of cooperatives as instruments of equity, social justice and economic development.” 

Payoyo said the tax exemption privileges is a social justice measure and can never be considered as fiscal incentive to businesses.

In a position paper submitted by the CDA to the House Committee on Ways and Means chaired by Rep. Romero Quimbo (Marikina, 2nd district), which is deliberating on three House Bills on the Rationalization of Fiscal Investment Incentives, it said that repealing the tax exemption of cooperatives “will defeat the very intent of the 1987 Constitution.”

It added that “cooperatives are voluntary organizations of people who want to improve their economic lives by their own initiatives and using their own resources.” Cooperatives primarily derive their capital from contribution of its members.

According to Hamilcar Rutaquio, chairman of the PCC, cooperatives movement is launching a nationwide campaign against proposed Fiscal Investment Incentives law and intensify their lobby against the proposed law in both houses of Congress. Tens of thousands of co-operators would hit the streets in Manila and key cities nationwide next month as a show of force against the proposed law, he said.

What the government should do, according to Atty. Gloria Fudalan, chairperson of the Philippine Federation of Credit Cooperatives is instead to support the growth of cooperatives and strengthen further their privilege of tax exemption.

This attempt to abolish the cooperative’s privilege of tax exemption “could be the most serious threat to cooperativism, which is celebrating its centennial in the country this year.”

While cooperatives enjoy certain tax privileges, cooperatives are in fact tax makers, said Payoyo. Taxes being withheld from fixed income from those directly employed by cooperatives, numbering over half –million Filipinos, he said is over P4 billion a year. It could be bigger as those indirectly employed by cooperatives run up to over 1.9 million people according to data from the CDA. Micro cooperatives or those with assets below P3 million comprise 76 percent of the country’s cooperatives.

Although, it believes that the proposed law is unconstitutional, the CDA wants to distance itself from the protests planned by cooperatives. “Our role is to inform them of these developments and leave it to them to draw up whatever action they deemed appropriate,” said Ray Ellevazo, executive director of CDA.

He however added that the CDA had already expressed before Congress its stand on the issue in the public hearing last August 11. “Sinabi po namin na if maipasa itong version of the bill that repeals the cooperative privilege of tax exemption, mamamatay ang mga kooperatiba. And we have expressed in writing the basis of this stand,” he told Mindanews.