Cagayan De Oro, May 31, 2017

As lawmakers extend their support to cooperatives by heeding the call of millions of cooperative members and agreeing to retain the VAT exemption privilege of cooperatives, Cooperative Development Authority (CDA) Chairman Orlando R. Ravanera continues to pronounce his continuing advocacy for cooperatives as instruments for social justice, economic development and equity.

In a related development, speaking with cooperative leaders in Cagayan De Oro today, Chairman Ravanera decries the grossly unfair and foul accusations and judgement by some government officials against cooperatives. He strongly states that cooperatives are job generators and tax makers, and certainly not abusive enterprises and tax shields. He describes as fully erroneous a statement alleging that the government is losing P25 billion annually due the utilization of said enterprises as tax shields.

Clarifying the point raised by a government official as quoted in a newspaper article that half of the 7.6 million members of the 9,431 reporting cooperatives in the country belong to rich cooperatives, Ravanera pointed out that the so-called “rich” cooperatives mentioned by the official are in fact the 751 registered cooperatives with members coming from the broad and marginalized basic sectors of society not the affluent ones and oligarchs. Even following the unjustly slanted statement, Ravanera said that in the average, each of the said members counting to 4,271.52 warm bodies obtained income from the transactions of the “rich” cooperatives at the gross amount of Php 8,102.25 each in one fiscal year. Deducting the operational expenses, the salaries and wages of cooperative employees that contribute income taxes, the indirect taxes, employees’ benefits, and the 30% statutory reserves intended for various purposes such as organizational stability and development, community and social development projects, human capital capacity building activities particularly the membership and community-based trainings, at the net, such amount would in actuality become “barya” when it finally reach the pockets of each member. These so-called rich cooperatives are in the majority, owned by poor and marginalized he said.

With deep conviction, he asks, “Should we then deprive them of a little additional income from their sacrificial pooling of skills, knowledge and resources through long years of self-help and mutual help efforts just because they have built their very own above-average cooperatives by repealing VAT exemption privilege? Isn’t this asset reforms, financial inclusion and inclusive growth initiated and accomplished by the ordinary people through their cooperatives? Why don’t the financial manager and policy makers look at VAT exemption or even the full implementation of Tax Exemption privileges of cooperatives under the Cooperative Code of the Philippines as incentives and rewards for the ordinary people who peacefully and collaboratively work hard for better quality of life? And even for peace and development in the urban areas and in the countryside?”

He further cites that there is no need for a new law that would mandate the BIR to audit all cooperatives because Republic Act No. 9520, specifically Articles 60, 61, and 144, and the CDA-Department of Finance (DOF) Joint Rules and Regulations implementing said provision of law, in relation to R.A. No. 8424 or the New Internal Revenue Code, As Amended, particularly Section 16, provides that the books of accounts and accounting records of the cooperatives can be examined by the BIR. In addition, the CDA is placing these enterprises into full scrutiny under the Agency’s regulatory activities such as inspection, examination and even investigation. The CDA, he said, has also institutionalized the accreditation of Cooperative External Auditors to protect the members and the public from exploitative and irregular acts. He continues that to address the concerns regarding cooperative transactions with members and non-members, the CDA now embarks on enhancing its database systems.

The CDA, according to the Chairman is even working for collaborative partnership with other government regulators such as the Department of Labor and Employment (DOLE) to implement government regulations and curb abuses.

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