Coops asked to submit report on tax incentives

MANILA, Philippines — The government is now requiring cooperatives to submit regular reports on the fiscal incentives they are enjoying to promote accountability and transparency, and to determine the impact of these perks to the economy.

This is pursuant to Joint Administrative Order (JAO) 1-2019, signed by Finance Secretary Carlos Dominguez last May 16, as approved by Bureau of Internal Revenue (BIR) Commissioner Caesar Dulay and Cooperative Development Authority (CDA) chairman Orlando Ravanera.

JAO 1-2019 lays out the rules and regulations on the implementation of Section 3 of Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) Law, which requires the CDA to submit a report on the tax incentives availed by registered cooperatives.

“It is the policy of the state to promote fiscal accountability and transparency in the grant and management of tax incentives by developing means to promptly measure the government’s fiscal exposure on these grants and to enable the government to monitor, review and analyze the economic impact thereof, and thereby optimize the social benefits of such incentives,” the order stated.

Under the joint regulation, all registered cooperatives shall file their tax returns and pay their tax liabilities, if any, using the electronic system for filing and payment of taxes of the BIR.

All registered cooperatives which were issued a certificate of tax exemption (CTE) and availed of tax incentives shall submit to the CDA the annual tax incentives report, which shall be duly signed by the chairman or general manager of the concerned cooperative.

The BIR and the CDA said the submission of the report would be required in order for cooperatives to continue enjoying fiscal incentives from the government.

“Submission of the reportorial requirements…shall be a continuing requirement for the effectivity of the certificate of tax exemptions of a registered cooperative,” the JAO said.

The CDA, for its part, shall submit to the BIR the list of all registered cooperatives. The agency shall also send to the BIR a consolidated annual tax incentives report, and the list of cooperatives which failed to submit their respective reports.

Meanwhile, the BIR is tasked to submit to the Department of Finance (DOF) the list of registered cooperatives, as well as the consolidated annual tax incentives report from the CDA.