SENATOR Sherwin Gatchalian urged the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) to suspend a regulation requiring cooperative members to secure a Tax Identification Number (TIN) before their cooperatives can receive tax exemptions.
“This policy on securing a TIN before obtaining a CTE (certificate of tax exemption) has negatively impacted our cooperatives, and suspending it is necessary as it is creating confusion on the ground,” Gatchalian said at a recent public hearing by the Senate Committee on Ways and Means.
The senator adverted to Revenue Memorandum Order (RMO) No. 76-2010, which mandates all members of a cooperative to obtain a TIN and submit it alongside the cooperative’s annual income tax return.
Gatchalian argued that under Republic Act No. 9520, also known as the Philippine Cooperative Code of 2008, as well as joint regulations issued by the Cooperative Development Authority (CDA) and the BIR, acquiring TINs for all cooperative members is not listed as a requirement for the issuance of a CTE.
The senator noted that implementation of this requirement varies depending on the interpretation of the concerned regional district office (RDO).
Cooperatives complained of being sent back and forth due to differing interpretations of the rule by various RDOs, creating further difficulties for their members.
“How can cooperatives help our poor fellow citizens, and how can we encourage them to register with the BIR if they themselves are being discriminated against just because of an agency order?” Gatchalian asserted.
He also cited challenges such as system glitches in the BIR’s online registration platform, lack of required documents like birth certificates, poor internet access, additional financial costs, and the difficulty of taking time off from farm work or other labor-intensive jobs.
Gatchalian revealed that most cooperative members earn below the taxable income threshold of P250,000 per year, making the TIN mandate unnecessary for many of them.
To address the issue, Gatchalian filed Senate Resolution No. 1236, directing the Senate Committee on Ways and Means to review the BIR’s issuance of CTEs, particularly the TIN requirement.
Those who are in greater need are the ones being burdened even more. We believe in the movement of the coops as a way to alleviate poverty in our country. Let’s not add to the struggles of cooperatives, as their clients are already poor, Gatchalian said.