Senator Sherwin Gatchalian has called on the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) to immediately suspend a rule requiring members of cooperatives to obtain their respective tax identification numbers (TINs) before they are granted tax exemption privileges.
Gatchalian made the call after the BIR issued Revenue Memorandum Order (RMO) No. 76-2010, which states that all members of a cooperative are required to secure a TIN, to be submitted together with the regular filing of the cooperative's annual income tax return (ITR).
The chairperson of the Senate Committee on Ways and Means pointed out that under Republic Act (RA) No. 9520, or the Philippine Cooperative Code of 2008 and the joint rules issued by the Cooperative Development Authority (CDA) and the BIR, the requirements for the issuance of a Certificate of Tax Exemption (CTE) do not include a TIN for all cooperative members.
“This policy on securing a TIN before obtaining a CTE has negatively impacted our cooperatives, and suspending it is necessary as it is creating confusion on the ground,” Gatchalian said during a recent hearing by the Senate panel on the issue.
He noted that the implementation of the requirement depends on the interpretation of the concerned regional district office (RDO).
“Kaya pabalik-balik ang mga coops dahil iba-iba ang interpretation ng mga kausap nilang RDO at doon nagkakaroon ng problema ang mga members (That's why the coops go back and forth because the RDOs they talk to have different interpretations and that's where the members have problems),” he observed.
Because of this requirement, many cooperatives said they could not obtain or renew their CTEs, causing financial burdens.
Moreover, the members also encounter glitches in the BIR’s online system, lack of birth certificates, unstable internet connections, additional financial burden, and the inability to leave farm work, among others.
“How can the cooperatives help our poor countrymen and how can we encourage them to register with the BIR if they themselves are being discriminated against just because of an order from the agency? Whoever is more in need, they are the ones being tortured,” he said.
“We believe in the movement of the coops as a way to alleviate poverty in our country. Let’s not add to the hardships of our coops because their own clients are already poor,” he appealed.