Senator Win Gatchalian has urged the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) to suspend the rule that requires members of cooperatives to obtain Tax Identification Numbers (TINs) before their cooperatives can avail of tax exemption benefits.
The call pertains to Revenue Memorandum Order (RMO) No. 76-2010, which mandates that all cooperative members secure a TIN and submit it alongside the cooperative’s annual income tax return in order to receive tax exemptions.
However, Gatchalian emphasized that Republic Act (RA) No. 9520, or the Philippine Cooperative Code of 2008, as well as joint rules issued by the Cooperative Development Authority (CDA) and BIR, do not stipulate TINs for all cooperative members as a requirement for issuing a Certificate of Tax Exemption (CTE).
“This policy, which requires securing a TIN before obtaining a CTE, has created confusion and negatively impacted cooperatives. Suspending it is crucial as it only adds complexity on the ground,” Gatchalian said during a recent public hearing held by the Senate Committee on Ways and Means.
The senator pointed out that the implementation of this rule varies depending on the interpretation of the concerned regional district offices (RDOs), leading to inconsistencies and confusion. “Cooperatives are forced to go back and forth due to different interpretations of the rule by various RDOs. This is where members face problems,” he added.
As a result of this rule, many cooperatives have reported difficulties in obtaining or renewing their CTEs, leading to financial burdens. Cooperatives shared their members’ struggles in securing TINs, such as technical glitches in the BIR’s online system, the lack of necessary documents like birth certificates, unreliable internet connections, and the inability to leave work in the fields.
“How can cooperatives help the poor and encourage them to register with the BIR if they are being discriminated against due to an agency rule? Those who need help the most are being burdened even more. We believe in the power of cooperatives to reduce poverty in our country. Let’s not make it harder for them, especially since their clients are already disadvantaged,” Gatchalian concluded.
