Press Release
September 29, 2009


Opposition Sen. Chiz Escudero yesterday warned the Bureau of Internal Revenue and the Cooperative Development Authority (CDA) it could face sanctions for the delay in the issuance of the regulations on the tax exemption and compromise of cooperatives.

In a letter to BIR chief Sixto Esquivias IV and CDA chair Lecira Juarez, the 39-year old lawmaker said both agencies have failed to comply with the 90-day deadline for the release of the required regulations of RA No. 9520, otherwise known as the Philippine Cooperative Code of 2008.

Under Article 140 of the same law, sanctions may be imposed against any public official or employee of any agency, bureau or office who in any manner hinders or restricts a cooperative's full enjoyment of the exemption from payment of taxes, fees and charges enumerated therein.

It imposes a penalty of one to five years in prison or a fine of not less than five thousand pesos or both on those found guilty of violating the law.

"So many of our people depend on the cooperatives movement for their livelihood. This law was passed to help them survive an economic crisis not of their making," Escudero said in a statement.

"It is my fervent hope that the regulations be issued with dispatch to realize this goal," he added.

The amended cooperative law prohibits a newly-organized cooperative from being registered and operated as a multi-purpose cooperative except after two years of operation.

It also increases the required minimum paid-up share capital from P2,000 to P15,000 to be registered as a cooperative and increases the number of members' votes from two-thirds to three-fourths all members with voting rights on certain matters.

The law also prohibits members of the board of directors of co-ops to hold any other position directly involved in the day-to-day operations and management of the cooperative, and bars any person engaged in a business similar to that of the cooperative or who in any other manner has interests in conflict with the cooperative to serve as elective or appointive officer in the cooperative.

Annual reports are to be provided the co-op members and the Cooperative Development Authority within 120 days from the end of the calendar year and failure to file shall subject accountable co-op officers to fines and sanctions, and may cause the revocation of the authority of the cooperative to operate, the law mandated.

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