Cooperatives summit rejects new tax rules

DELEGATES to the National Summit Conference of Cooperatives are asking public officials to help convince President Rodrigo Duterte to uphold tax exemptions for cooperatives.

The move to keep tax exemptions for registered cooperatives was the highlight of the national summit held at the Waterfront Hotel, Cebu City, Monday, Dec. 9, 2019.

A copy of the group’s position paper was sent to SunStar Cebu.

Delegates said the right of cooperatives to enjoy tax exemptions was placed in “clear and present danger” of being abolished with the issuance of Joint Administrative Order ( JAO) 1-2019.

The JAO was issued by Finance Secretary Carlos Dominguez last May 16 in line with the Tax Reform for Acceleration and Inclusion Act or Train law that required cooperatives to submit to the Cooperative Development Authority (CDA) reports on tax exemptions.

The CDA then submits a consolidated report to the Bureau of Internal Revenue that recently found abuses of the tax exemptions granted cooperatives. The JAO requires cooperatives to file tax returns and pay tax liabilities.

The delegates said that since the passage of the Cooperative Code, more than 6,000 registered cooperatives in the country, including its 11 million members, have been enjoying tax exemptions. The body said, “The JAO, which by any measure is not a law, defines violation of its provisions as an offense and imposes the penalty of loss of salary or suspensiom for public officers or employees and deprivation of tax exemption for registered cooperatives. This is totally wrong and unacceptable in our country.”

The delegates agreed to ask the CDA governing board to pass a resolution reconsidering or withdrawing approval of the JAO. They also agreed to take legal action by filing petitions for declaratory relief with the courts in their respective regions.

These moves are in addition to asking elected public officials to support their call.