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The increasing number of registered cooperatives in the country manifests an increasing awareness of people on the significance of cooperative. Also, the current policy of the government to reform the transport system of the country may have contributed to the number of transport cooperatives registered. Some transport groups may have opted to register as cooperatives rather than as corporations.
Good news to the residents of Baguio and Benguet. The latest information was that the application of the Benguet Electric Cooperative for registration with the Cooperative Development Authority was finally realized. This situation requires adjustment on the part of the electric cooperative’s manpower to comply with the provisions of RA 9520 and its revised implementing rules and regulations. We encourage the public to help in the process of shifting and upscaling of operations. I trust the competencies of the BENECO Board of Directors and employees that they can fully serve the public with gladness given the favorable environment.
As we encounter changes brought about by technological changes, shifting government policies, socio-economic and environmental challenges, cooperatives should revisit their present operations. There is a need to align with existing government policies as part of good governance.
On the aspect of compliance, cooperative officers should ensure that the provisions of the Articles of Cooperation especially on purposes should match the provisions in the Certificate of Registration (CoR) with the Bureau of Internal Revenue and the Local Government Unit. Every undertaking should be reflected in the purposes and as basis in filling up application for issuance of CoR and Business/Mayor’s Permit. Cooperatives are also encouraged to secure accreditation from the local government. In case additional services are rendered then there is a need for the cooperative to update its records with CDA through amendment of the provisions of its Articles of Cooperation. Upon issuance of the Certificate of Amendment the cooperative should also update its record with the Bureau of Internal Revenue. Failure to comply with such may entail huge penalties especially when transactions are considered as unrelated to the business objectives.
Another area that can be possibly enhanced by the cooperative its operation. Cooperatives receive share capital, savings and time deposits and generate surplus from business undertakings. Each cooperative should come up with an investment committee that will craft guidelines on the proper management of funds. Sources should be identified and treated anchored on the purposes or objectives of the cooperative. Generated funds should always be invested in secured institutions in accordance with government rulings. The importance of protecting the members’ resources should be ascertained by leaders. Also, the welfare of the personnel should always be considered in the conduct of business. Human resource as the greatest asset cannot be taken for granted as their role is critical in the operations.
Moreover, procurement or purchases of properties, plant and equipment should be done above-board. The essence of cooperative is to help in the growth and development of the nation. As a juridical entity, it should comply with the required rulings to avoid unnecessary problems in future dealings with the government. The implementation of the Tax Incentive Management Transparency Act (RA 10708) requires cooperatives to submit reports to regulatory authorities. CDA being in charge of cooperatives usually consolidate reports of cooperatives that availed tax exemption from the BIR. For those entities without tax exemption it expected that they will pay taxes to the government based on the provisions of the law.
In these trying times that the government faces financial difficulties, cooperatives should look at the aspect wherein it can contribute to revenue generation. While cooperatives have privileges like tax exemptions it should understand that in order to avail of such there certain requirements to be complied. Failure to comply would mean imposition of fees and charges by regulatory agencies. The situation brings focus on the need to revisit organizational structure that can help officers relate with various entities. Business alliance and networks should be established to support the cooperative enterprise.
On the aspect of involvement and support to government initiatives, the participation of cooperatives in generating revenues for the country is critical. The time has come that medium and large cooperatives that operate income generating business establishments continually share part of its resources to the government either in the form of corporate social responsibility or taxes. As the government would like to raise revenues from all sectors of the country including cooperatives and individuals, allow me to borrow some words from google. “In Commissioner v. Algue, the Supreme Court said that taxes are the lifeblood of the government and should be collected without necessary hindrance. They are what we pay for a civilized society. Without taxes, the government would be paralyzed for lack of motive power to activate and operate it (the law student).
Finally, I would not be surprised when someday cooperative operations will be subjected to certain audits by government entities to monitor compliance to regulatory bodies. Some cooperatives had been audited in the past and we expect that others will follow as the government is bent on ensuring quality and productivity. In addition, the government should generate revenues to bankroll its programs, plans and activities. The safest way for cooperatives to avoid inconveniences and incurrence of huge taxes, fees and charges is to follow the rule of law. For sure cooperative leaders have nothing to worry about tax mapping and audit as long as they operate within the bounds of law.