The Bureau of Internal Revenue has finally granted the longtime request for income tax exemption of one of the biggest and most successful credit cooperatives Negros Oriental.

BIR issued a ruling on January 31 granting the Perpetual Help Community Cooperative Inc. exemption from income taxation, making it the first credit cooperative in the province to enjoy a tax exemption.

PHCC general manager Michael Hojas   explained that, before  the ruling, PHCCI income deposited in various financial institutions were subject to a 20 percent interest tax.

Hojas said the coop has pegged its investment income from member deposits this year at around P8 million.

“But now that we are exempted from tax, it may be even higher,” he said, adding that the exemption will translate into a higher interest on share capital which PHCCI gives to its members every February.

Internal auditor Ramil Repe of PHCCI said the cooperative, which has 32,000 members, started the tedious process of applying for tax exemption since the creation of Republic Act 6938 or the Cooperative Code of the Philippines in 1990, but it was only after RA 9520, or the Philippine Cooperative Code of 2008, was enacted that things started looking up. “The RA9520 is largely responsible why we were finally granted a tax exemption,” he said.

RA 9520 amended RA 6938 wherein registered cooperatives under the Code “which do not transact any business with non-members or the geenral publich shall not be subject to any government taxes and fees imposed under the Internal Revenue Laws and other tax laws.”

Dr. Profetiza Lim of the Provincial Cooperative Development Council said, are very happy with PHCCI's tax exemption and urged other cooperatives to also follow PHCCI's footsteps and work towards income tax exemption. “We at PCDC are willing to help them out if they have any problems with their application,” Lim said.*PIA

back to top