Cooperatives protest planned removal of tax exemptions, release of credit info
Wearing paper hats that say, “No to repeal of cooperatives’ tax exemptions,” members of a Baguio cooperative pose for photographs after staging a rally on Saturday against congressional measures that imperil the tax privileges of all cooperatives.About a thousand members of local cooperatives in Baguio City joined the protest rally.Aseparate rally was staged in La Trinidad town in Benguet province. —VINCENT CABREZA
BAGUIO CITY—Major cooperatives in the city and Benguet province staged simultaneous rallies on Saturday to protest a perceived two-pronged attack on their sector: finance reform measures that threaten to remove their tax exemptions, and a directive to submit their members’ credit histories.
Wearing paper hats and t-shirts bearing the slogan “No to repeal of cooperatives’ tax exemptions,” about a thousand cooperative members, many of them teachers, marched along downtown Baguio against House Bill No. 4774, or the Tax Reform for Acceleration and Inclusion Bill.
Tax privileges
They said the measure would take away the tax privileges granted to cooperatives by the Philippine Cooperatives Code of 2008 (Republic Act No. 9520).
In Benguet capital town, La Trinidad, about 500 members of local farmers cooperatives assembled at the La Trinidad municipal gymnasium to express the same objections.
The repeal of the cooperatives’ tax exemptions was concealed in congressional measures that would expand the Value Added Tax (VAT) by including cooperatives, the groups said.
Social reform measure
Bills like HB No. 4774 were initially packaged as social reform measures aimed at benefiting the poor by reducing personal income taxes, but it proposes tradeoffs at the expense of the country’s cooperatives movement, said lawyer Nelson Gayo, spokesperson of the Baguio Benguet Community Credit Cooperative (BBCCC) which led the Baguio rally.
On April 17, BBCCC issued a resolution opposing the proposed repeal of Articles 60 and 61 of RA No. 9520, through the tax reform measures.
Article 60 prescribes that “duly registered cooperatives … which do not transact any business with nonmembers or the general public shall not be subject to any taxes and fees imposed under the internal revenue laws and other tax laws.”
Article 61 grants cooperatives (valued at P10 million) full exemptions “from all national, city, provincial, municipal or barangay taxes of whatever name and nature,” while cooperatives worth more than P10 million are freed from paying income tax and VAT for “transactions with nonmembers” under certain conditions.
Protest actions
Gayo said key tax measures like HB No. 4774 were set for plenary deliberations when Congress resumes this month, so national and provincial cooperatives were assembling more rallies and protest actions.
Gayo said Congress might try to water down tax provisions because of the cooperatives’ reaction, but “this sector would never agree to a compromise.”
“We want lawmakers to spare cooperatives from taxes. Period,” he said.
BBCCC is also headed to court stop the Securities and Exchange Commission (SEC) from requiring all cooperatives to provide a list of their members’ borrowing history on June 30, Gayo said.
Independence
SEC was tasked to collect data from all registered firms and organizations by Republic Act No. 9510 or the Credit Information System Act.
The law created the Credit Information Corporation which would consolidate and act as the primary repository of credit information, including the history and financial condition of people who borrow money.
“This requirement would violate the cooperatives’ independence … We are being treated like other lending institutions,” Gayo said. —VINCENT CABREZA
