Tax exemption of cooperatives

DILG SEC. JESSE ROBREDO DIRECTS LOCAL CHIEF EXECUTIVES ON THE EXEMPTION FROM PAYMENT OF TAXES BY COOPERATIVES

Sec. Jesse M. Robredo of the Department of Interior and Local Government (DILG) had directed all provincial governors, city mayors, municipal mayors to strictly observe the exemption from payment of local taxes, fees and charges by duly registered cooperatives.

Sec. Robredo made the call through DILG Memorandum Circular No. 2010-120 dated October 20, 2010, citing Sec. 133 of the Local Government Code of 1991 (R.A. 7160), which provides that "..unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of taxes, fees or charges on Countryside and Barangay Business Enterprises and cooperatives duly registered xxx."

The Circular also cited Section 234 of R.A.7160, which exempts from payment of real property tax "..xxx all real property owned by duly registered cooperatives as provided for under R.A. 6938 xxx".

However, Sec. Robredo pointed out that cooperatives transacting business with both members and non-members are still required to obtain or secure a Mayor's permit, and pay the commensurate cost of regulation, inspection and surveillance of the operation of its business, but not exceeding One Thousand Pesos (P1,000.00).

These types of cooperatives shall also secure a Community Tax Certificate, as a juridical entity and pay the basic tax of Five Hundred Pesos (P500.00); and pay service charges or rental for the use of property and equipment of public utilities owned by the local government such as charges for actual water consumption; electric power, toll fees for the use of public roads and bridges, and the like.

Sec. Robredo directed all DILG Regional Directors and the ARMM Regional Governor to cause the immediate and widest dissemination of Circular 2010-120 to all local government units within their jurisdiction. (END).

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