Tuesday, December 3, 2013
This is the big question.
This is following the publication of the news about the issuance of BIR Rev. Memo. Circular No. 74-2013. According to the published news, this withdrew the tax exemption privileges of NEA-registered electric cooperatives.
We visited the BIR website (www.bir.gov.ph), prior to posting this blog entry (Dec. 4, 2013) and the copy of the said Circular is not yet uploaded in the website.
Not seeing such Circular, we wish to quote instead from the published news report ("Power Rate Hike Looms: Oil Companies Implement Hefty Fuel Price Hike," by Jun Ramirez, et al, Mla. Bulletin, pp. 1 & 6, Dec. 4, 2013):
"...Power rates in provinces serviced by ELECTRIC COOPERATIVES (ECs) are expected to rise after the Bureau of Internal Revenue withdrew their tax exemption privileges...
...The possibility of power rate hike surfaced after BIR Commissioner Kim S. Henares signed yesterday Revenue Memorandum Circular No. 74-2013 that explains the tax liabilities of ECs registered with the National Electrification Administration (NEA) relative to BIR Ruling No. 398-2013 issued early this month...
...Henares came out with the Circular in response to the query of Marinduque Electric Cooperative (Marelco) seeking tax exemption as a non-stock and non-profit organization....
...Marelco invoked the old RMC 72-3003 (sic) implementing Section 39 of Presidential Decree No. 269 promoting and encouraging the development of electric services in the countrysides...
...But Henares said the decree was cancelled when then Pres. Corazon C. Aquino issued Executive Order No. 93 in December l987...
...."Accordingly, this office opines that Marelco's income from its electric service operation is subject to income tax beginning January 1, 2004. However, Marelco is subject to all other national government taxes and fees," Henares said...(end of quotes).
So, there. What about electric cooperatives which had been registered with the Cooperative Development Authority, instead of NEA? Are they also affected by the BIR Circular? Let's wait to see the copy of the aforecited Circular. (END).
Sunday, December 1, 2013
Thursday, November 28, 2013
Wednesday, November 27, 2013
In one fell swoop, the Cooperative Development Authority (CDA) recently ordered the dropping from rolls of some 33,981 cooperatives, more or less.
So, they were bereft of their Certificates of Registration, and they don't have authority to operate. Many of these were no longer operating anyway, before the Cooperative Code of 2008 took effect. They failed to re-register under R.A. 9520. Some were registered under R.A. 9520, but were ordered cancelled due to various reasons. After due process, says the CDA.
What now are to options left for these cooperatives? Can they re-apply again, maybe after complying with some imperatives? Or will they be now relegated to oblivion? Whatever. The nagging questions to the ordinary folks is what happens to the savings deposits (demand, time, other special deposits)?
Who will now preside to make sure that millions of cooperative members get their unencumbered deposits, or those not used as loan collaterals. Forget about the share capital. For all purposes, these cancelled cooperatives are losing entities and the share capital - the extent of a member's liability to the cooperative is gone.
What about cooperatives who were cancelled, or were losing due to the possible fraud that might have been committed by some officers and management people of these cooperatives? Who will run after them? What are CDA's obligations, if any, in this regard?
For example, our cooperative had placed some P100,000 in time deposit to one of these cancelled cooperatives in our area. We filed a case. We won. But we were not able to enforce the court ruling. The cooperative's officers and management people are no where to be found. There were no identifiable assets to attach, etc.
Multiply these cases and you will find the gravity of the situation. Assuming that each cooperative has an average of 100 members, some 3,398,100 members would be involved. What of the assets (physical assets, land, building) and loan receivables of these cooperatives? What about the creditors of these cooperatives?
Would there be formal procedures for these cancelled cooperatives to follow following what appears to be an involuntary dissolution?
What preventive measures and regulations can the cooperative sector expect from the CDA to prevent the same massive cancellations and apparent failure of cooperatives?
I have yet to hear any reactions from the local cooperative sector. There were no congressional hearings on this? So many questions. So many explanations that need to be given. But who will give them? What about you, what is your reaction to all of these?
Thursday, November 21, 2013
The International Co-operative Alliance (ICA) and the Cooperative Development Foundation of Canada (CDF) have separately called for international solidarity in giving assistance to cooperatives hit hard by Super typhoon Haiyan, locally named Yolanda.
Dame Pauline Green, ICA president, issued a "message of generosity" in the wake of major destruction in the Philippines by Haiyan, urging its members to "support the ICA cause by giving generously to the Philippines..".
"You will have seen the desperate news coming from the Philippines in the aftermath of the devastating typhoon late last week. While precise reports are always difficult to obtain immediately following such events, reliable accounts place the loss in the thousand of lives," Green said in a statement posted in the ICA website.
"We know from experience that many multiples of that will have been displaced. We have been in communication with our members in the Philippines and they are attempting to assess the situation under very difficult circumstances," she added.
On the other hand, the Cooperative Development Foundation of Canada (CDF) has appealed to members of credit unions and co-operatives across Canada for financial support to aid victims of "super" Typhoon Haiyan as it rips across the central Philippines.
Co-operative organizations in the path of the typhoon include members of the National Federation of Co-operatives of Persons with Disability (NFCPWD) and RIMANSI Micro-Insurance Regional Resource Center, both partners supported by CDF and the Canadian Co-operative Association (CCA).
CDF's fundraising efforts will be directed to the CDF Philippines Relief fund. When a partner co-operative is in immediate need, CDF provides emergency funds to help that partner restore service to its members as quickly as possible, CDF said in its press reports on its website. (END).
Wednesday, November 20, 2013
The Cooperative Development Authority (CDA) has revoked the Certificates of Registration of some 19,791 cooperatives nationwide, in a recent order published November 21, 2013 in a national newspaper.
Among the reasons cited for the cancellation of the cooperatives' authority to operate are: the cooperatives' failure to comply with CDA's required mandatory reports and statutory compliance requirements; or the failure to register with CDA, as provided for in Art. 144 of RA 9520.
In what is apparently a partial list, CDA published the names of the cooperatives whose Certificates of Registration were cancelled.
The list, in the order of the most number of cooperatives ordered to stop operation are: Region IV, with 6,734 cooperatives, comprising 34.02% of those published; Region III, with 4,218, 21.3%; Region I, with 3,784, 19.1%; Region V, with 2,364, 11.94%; National Capital Region (NCR), with 1,547, 7.8%; Region II, 1,003, 5.06%; and by Cordillera Administrative Region (CAR), with 141 cooperatives, 0.71%.
CDA said that the notices/orders it sent to some cooperatives included in the list were returned by the Philippines Postal Corporation to CDA for the reason, either not found in the address as stated, unknown address, and the like.
On the other hand, some cooperatives listed either failed to appear before CDA despite receipt of notices/orders, or failed to secure new Certificates of Registration pursuant to Art 144 of RA No. 9520, CDA informed.
Moreover, the officers of some cooperative failed to appear and provide justifiable cause for their continued operation, hence, their certificates of registration were ordered cancelled after going through the required process, CDA added.
The list of cancelled cooperatives was published in The Daily Tribune. (END).