Press Release
February 20, 2009

ROXAS TO BIR: STOP 12% VAT COLLECTION VS SUGAR COOPS
TAX EXEMPTION MANDATED IN NEW COOPERATIVE CODE

Liberal President Senator Mar Roxas today called on the Bureau of Internal Revenues (BIR) to immediately stop its collection of a 12% value added tax (VAT) against sugar cooperatives in accordance to a new amendment passed to the Cooperative Code.

Roxas said Article 61 of the amended Cooperative Code, or Republic Act 9520 which was recently signed into law by President Arroyo, exempts all cooperatives in the country from the payment of taxes for their transactions with their members and non-members.

"Wala nang dahilan para sa BIR na mangolekta ng VAT sa mga produktong ibinebenta ng mga kooperatiba. Hindi na dapat pahirapan pa ang maliliit na kooperatiba ng mga magsasaka (BIR has no more reason to collect VAT from products that cooperatives are selling. We should ease the burden of small farmers' cooperatives)," he said.

"Mahalaga ang kabuhayan ng mga magsasaka. Dapat tinutulungan sila ng gobyerno, hindi sinasakal (It's important to protect the livelihood of farmers. Rather than choke them, the government should come to their aid)," he added.

The Ilonggo senator had earlier sought a Senate inquiry into the BIR's imposition of a 12% VAT against the sales of sugar cooperatives, which he had insisted violated provisions in the Cooperative Code and the National Internal Revenue Code of 1997, which exempts agricultural cooperatives registered with the Cooperative Development Authority from paying VAT for the sale of their products.

The BIR had used as an excuse to justify its illegal act Revenue Regulation Nos. 29-2002, 2-2004 and 4-2004, which it promulgated to give it the authority to collect VAT from sugar cooperatives.

But Roxas said the new Cooperative Code had invalidated provisions of existing laws or regulation that authorizes the collection of taxes and fees against cooperatives.

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