At the Visayas Tax Forum held at the penthouse of the Cebu CFI Community Cooperative Thursday last week, former Cebu governor and Deputy House Speaker Pablo Garcia showed that even at the ripe age of 90, he can give national legislators a run for their money.
Garcia spoke before some 100 Central Visayas co-op leaders and members who showed up to get updates about moves by the Department of Finance to strip cooperatives of their tax-exempt status, a privilege granted to self-help enterprises by virtue of RA 9520, Sections 60 and 61.
The DOF proposal is contained in HB 2765 sponsored by Cebu 6th district Congressman Luigi Quisumbing. The counterpart measure in the Senate, SB2048 is authored by Senator Loren Legarda.
Garcia lambasted the proposals not only because they will impose a heavy burden on grassroots enterprises but also because the move will turn off foreign investors. He stressed the intention of collecting more taxes shows the government is bent on looking for more money without careful study.
Moreover, the Philippines has one of the lowest foreign direct investments (FDIs) among countries in Southeast Asia, adding that the removal of tax incentives will further weaken the Philippines’ efforts to lure foreign investments, according to Garcia.
The 2014 United Nations Human Development Report cited the Philippines as having the lowest Foreign Direct Investments (FDI) among members of the Association of Southeast Asian Nations (Asean), accounting for only 1.12 percent of the Philippines’ gross domestic product (GDP). Indonesia has 2.26% FDI in its GDP; 2.35 percent in Thailand, 3.66 percent in Laos, 4.17 percent in Malaysia, 6 percent in Vietnam; 7.03 percent in Cambodia, 7.39 percent in Brunei, and 20.62 percent in Singapore. Myanmar is not cited in the UN report (Philippine Daily Inquirer, August 20, 2014).
Another high point of Garcia’s speech was directed at the Cooperative Development Authority, whom he applauded for standing up on the Finance Department’s proposal to repeal tax incentives granted to cooperatives. He described the ongoing protest raging among the co-op sector as a “revolution”.
In a previous column, I wrote that the insidious move to kill cooperatives was inadvertently discovered by CDA Administrator Benjie Oliva during a hearing on the national budget jointly conducted by the House Ways and Means committee and the Trade and Industry panel. After digesting the impact of the tax repeal clause, the Bohol native stood up to air his strong objections against the proposal, saying it will kill the cooperative movement and render the CDA inutile and useless.
The apex body of cooperatives known as the Philippine Cooperative Center subsequently spearheaded a nationwide protest action through a series of tax fora in collaboration with the National Anti-Poverty Commission, National Cooperative Development Councils, League of Provincial Cooperative Development Councils, the co-op bloc in Congress and the Cooperative Development Authority. The protest action was twinned by a forceful lobby in both houses of Congress by the loose coalition.
As of last week, Rep. Miro Quimbo has secured the commitment of the DOF not to pursue the move. For his part, Cong. Luigi Quisumbing will abort the express provision to repeal the tax incentives on co-ops. And as far as Senator Legarda is concerned, I don’t think she will go against the current. As I have stated in a previous column, the proposal to tax cooperatives is dead in the water. In an election year, it will amount to political hara-kiri, to quote Mr. Bobbit Avila, who writes for another paper.
It has often been said that eternal vigilance is the price of liberty and one must pay the price to secure its blessing. The other grace in the case of the sector’s fighting stance comes in the form of a commitment from Senate Finance Committee chairman Ralph Recto who pledged to increase the CDA budget in the Upper Chamber’s rendition of the 2016 National Appropriations Law, tenfold.
It must be noted that in CY 2015, CDA which tends to the regulation and development of 23,000 cooperatives with 13 million members has a budget of only P320 million. The Philippine Carabao Center, a mere division in the Department of Agriculture outpaces CDA with a budget of more than P404 million. If Sen. Recto delivers on his promise, the CDA budget will hit P3 billion.
I gathered this piece of positive news from CDA Chairman Orlando Ravanera who told this corner that during the Senate budget hearing last week, he was quizzed by Senate President Franklin Drilon about the mandate of the CDA. DOF Sec. Cesar Purisima and BIR Commissioner Kim Henares were also grilled by the powerful chairman of the Senate Committee on Finance.
To the question, whether the DOF and BIR are trying to repeal the tax-exempt privileges of the sector, Commissioner Henares reportedly replied, “I don’t know where it’s coming from.” A few more exchanges ensued, after which, Sen. Recto told Henares, “Mag senador ka muna” (Make yourself a senator first).
* * *
By the way, I had the opportunity to interview Noy Pabling and Retired Judge Ezperanza “Mam Inday” Garcia, CFI chairperson in the co-op’s swanky boardroom during lunch break of the Visayas Tax Forum.
Noy Pabling didn’t falter when I asked him, “Is there a co-op vote?”
The question is relevant and intriguing in light of the recent tax repeal brouhaha, which had congressional leaders and key policymakers backtracking and even bending over backwards to accommodate the co-op agency with a hefty budget increase.
I hope to share the highlights of this interview in future articles.
Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of Cebudailynews. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.
