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Manila Bulletin devider Philippines devider National devider Gatchalian wants Senate inquiry on tax benefit threats vs coops

Gatchalian wants Senate inquiry on tax benefit threats vs coops

Published Jan 26, 2025 05:52 am

Senator Sherwin Gatchalian has called for a congressional inquiry into a Bureau of Internal Revenue (BIR) requirement that allegedly threatens the tax exemption privileges of cooperatives. 

 

Gatchalian is referring to the requirement for cooperative members to present a Tax identification number (TIN) when obtaining a Certificate of Tax Exemption (CTE). 

 

Through its Revenue Memorandum Circular (RMC) No.124-2020, the BIR stated that the TIN requirement is based on a provision of the National Internal Revenue Code which states that any person required under the Code to make, render, or file a return, statement, or other document must be assigned or supplied with a TIN. 

 

The Senate Committee on Ways and Means chairperson, however, said that the submission of TINs by all members of cooperatives is not a prerequisite for tax exemption under Articles 60 and 61 of the Philippine Cooperative Code of 2008. 

 

“The tax exemption granted by law to cooperatives is under threat because of this BIR requirement,” Gatchalian said, as he filed Senate Resolution 1236, calling for a hearing to address this particular issue. 

 

The senator also pointed out that most members of registered cooperatives are individuals from the informal sector of the economy, who often see no need to obtain a TIN. 

 

“Cooperatives are designed to empower our poor constituents, especially those in the informal sector. But the BIR requirement has created a lot of confusion and discouragement,” he noted. 

 

“For example, if you have market vendors as coop members, you cannot just force them to get a TIN,” the lawmaker explained, citing complaints from cooperatives in Valenzuela.

 

Gatchalian also noted there were also reports of Revenue District Offices (RDOs) refusing to accept TIN applications from cooperatives. 

 

Some RDOs reportedly impose a limit on the number of TIN applications a cooperative can process each day, prioritizing other taxpayers instead, according to the senator.

 

Gatchalian also raised concerns about the frequent unavailability of the BIR's online registration and update system, hindering cooperatives from processing TIN applications on behalf of their members. 

The agency requires cooperatives to secure proper authorization from members before applying for their TINs. 

 

Related Tags

BIR CIRCULAR Sherwin Gatchalian COOPERATIVE GROUPS
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