The moment Daniel Ang, vice chairman of the Philippine Cooperative Center, the apex body of Philippine Cooperatives, rolled out the online petition calling on lawmakers not to strike out the tax-exempt status of cooperatives last September 6, one could sense the panic and righteous indignation of the sector over disturbing developments in Congress.
I right away signed the petition and the online traffic in the host site, Change.org must have gone busier than usual as hundreds of co-op leaders and members also manifested their indignation over House Bill 2765.
HB 2765 titled, “An Act Rationalizing the Grant of Fiscal Incentives for the Promotion of Incentives and Growth, and for other Purposes” is sponsored by Rep. Luigi Quisumbing of Cebu’s 6th district. The bill is expected to be consolidated with similar other measures which aims to lift tax-exemption privileges of co-ops and other sectors, namely, HB 302 by Rep. susan Yap (2nd district, Tarlac); HB 1788 by Cagayan de Oro Cong. Rufus Rodriguez and his brother, Abante Mindanao party-list Rep. Maximo Rodriguez.
In the Senate, there is SB 2048 by Sen. Loren Legarda, SB 987 by Sen. Ralph Recto and SB 35 by Sen. Cynthia Villar. Holding the distinction of authoring a proposal in the Senate that provides for the lifting of tax privileges earlier granted to co-ops under Articles 60 and 61 of RA 9520 is Sen. Loren Legarda.
The resentment over moves to tax co-ops spread even among non-co-op members who signed the online petition. May I quote in part the campaign rationale, which the PCC put so well:
“Cooperatives are social enterprises that provide social services to the poor. These are social services that the government should have provided us — capital for small businesses, training for values and leadership, loans with low interest and with minimal documentation for immediate financial needs, cheaper goods for everyday needs, insurance and medical care at affordable cost, decent housing, and others.”
“Tax exemption of cooperatives is a social justice measure and can never be considered as fiscal incentive to business. Despite this privilege, cooperatives are in fact tax makers by delivering into the government treasury some P4 billion a year through the taxes collected from over half-a million of their employees. Apart from the taxes collected, around 1.9 million people are indirectly employed in the cooperative sector.”
The launch of the petition two days ahead of the hearing by the House Ways and Means committee on HB 2765 set the tone of the day in Congress for the cooperative party-list bloc led by Reps. Cresente Paez, Anthony Bravo (Co-op Natcco) and Edgar Masongsong of 1-Care who called for a press conference. Afterwards, the bloc made its way in deliberations led by Marikina Rep. Miro Quimbo, head of the panel which was then scheduled to discuss the various fiscal incentives bills. I think Congressman Quimbo earned the respect of co-op stakeholders and earned the tag, “Madaling kausap” (easy to deal with) that day because he promptly assured them he will oppose moves to strip the sector of its tax-exempt status.
It turned out that Quimbo received a letter from Rep. Luigi Quisumbing stating that he will “propose an additional provision in HB 2765 maintaining tax exemptions to cooperatives and barangay small business enterprises in view of the nature of such organizations’ mandate and services rendered to the people.”
First of all, it is not enough for Congressman Quisumbing to simply backtrack on the issue. He should have met with the co-op delegation that day and apologized for failing to consult the sector on a measure that directly impacts on cooperatives. As a representative of the people, he owes it to stakeholders to know their sentiments and factor it in the final shape of the legislation.
Co-op advocates are now training their guns, so to speak, in the Senate and watch if Sen. Legarda will actively push SB 2048, but I really believe the proposal is dead in the water. As I write, Sen. Sonny Angara has reportedly declared he would side with cooperatives.
The cooperative movement has claimed partial victory, and although the battle is far from over, the equation looks reassuring.
First of all, information technology has enabled stakeholders to make their voices heard in real time. The virtual crusade has fostered transparency in the workings of Congress, shaped a critical mass and strengthened the co-op partylist bloc to oppose moves to diminish the sector. The other factor in the equation is the election period. The online petition impacts on the political plans of many congressman and senators for 2016.
I have always maintained that no right thinking politician will work against the interest of self-help organizations like co-ops and barangay small business enterprises because they bridge the gap in the delivery of basic services which is a function of the public sector.
Had the billions of pork barrel funds that went into bogus organizations been infused in to thousands of micro and small self-help organizations, how much better the situation of our people would be in the countryside.
Still, if politicians insist in their twisted belief and run after more than 20,000 micro and small co-ops, they will not only be rejected at the polls but also written down in history as some of the most loathsome people who walked the earth.