BIR stops registration of small scale mine co-ops

BAGUIO CITY—The Bureau of Internal Revenue (BIR) stopped the Cooperative Development Authority (CDA) from registering small-scale mining cooperatives last year, one of the reasons legalizing this profitable underground sector has been delayed, a top CDA official said on Wednesday.

In a press forum, lawyer Franco Bawang, officer-in-charge of the CDA office in the Cordillera, said the memorandum, issued in early 2012, discouraged his agency from enlisting pocket mining cooperatives, fearful that these groups would be used as tax shelters and derail the agency’s efforts to collect fees from the small-scale mining trade.

Republic Act No. 6938 (Cooperative Code of the Philippines) grants cooperatives varying tax incentives. Section 62 of the law states that “cooperatives with accumulated reserves and undivided net savings of not more than P10,000,000 shall be exempt from all national, city, provincial, municipal or barangay taxes of whatever name and nature.”

But the government requires small-scale miners to form into cooperatives to operate “Minahang Bayan” zones, as prescribed by President Aquino’s mining policy, Executive Order No. 79, said Leoncio Na-oy, secretary-general of the Benguet Federation of Small-Scale Miners Inc. (BFSSMAI).

Lomino Kaniteng, BFSSMI president, said no Minahang Bayan zone had been approved more than a year after the President issued EO 79, which left 66 pocket mining associations in Benguet province in limbo.

These groups oversee 200,000 miners in the province who are covered by a mining ban. The mining policy requires all pocket mining operations to take place only within the Minahang Bayan.

Bawang said the BIR and the CDA agreed to relax this ban toward the end of 2012, but the new process requires pocket mining cooperatives to process their applications at their agency’s Metro Manila office.

Benguet Gov. Nestor Fongwan, who joined the press forum, said the government has become too strict and too bureaucratic. Vincent Cabreza and Kimberlie Quitasol, Inquirer Northern Luzon