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Co-ops to issue TINs to members (TIN Series Part 3)

Posted July 28, 2020


QUEZON CITY -- The Tax Identification Number (TIN) of co-op members is very important because without it, the Bureau of Internal Revenue (BIR) cannot issue a co-op its Certificate of Tax Exemption (CTE).

Co-op leaders at a series of meetings with the Department of Finance, the BIR, and the Cooperative Development Authority (CDA), have long complained on the challenge of obtaining the TIN of members.  

At a particular meeting on January 29 in the House of Representatives, COOP-NATCCO Representative Ben Canama chaired a meeting of the government agencies’ officials with co-op leaders.

Cebu Peoples Multi-Purpose Cooperative CEO Macario Quevedo summarized the trials and challenges of co-ops: “We have members whose 1) whereabouts are unknown 2) who are possibly deceased or abroad 3) and almost impossible to contact.   Thus, it is difficult to get their TIN and the co-op is condemned to pay tax in the future.”

So CPMPC considered another option just to maintain its CTE: delist those members.  But they have Share Capital in the co-op.

CDA Executive Director Rey Elevazo interjected that CDA will fight for members never to be delisted just because of the TIN requirement.  

The BIR officials cited Revenue Memorandum Order 76-2010 Section 5, which states the co-op shall submit the Original Copy of Certification under Oath of the List of Cooperative Members with their respective TIN and their capital contributions prepared by authorized official of the Cooperative.

For the initial submission of this list of members, those without TIN may temporarily use NSO number of other government issued ID number of Community Tax Certificate Number.

In Section 8, it says:  “Subsequently, however, the cooperative should require all their members to secure a TIN with the BIR for the updated list of members to be submitted together with the regular filing of the co-op’s annual income tax return.”

“TIN requirement is to prove that you are transacting with members.  Because if they do not have a TIN, we presume that your co-op is conducting business with non-members.  So being a co-op, you must require members to have a TIN,” a BIR official said.

“Your members receive services and benefits from the co-op.  Since they are receiving something, the assumption is that they have income.  So being an income-earner, there is flow of wealth, and all taxpayers are required to have TIN,” they added.

According to the BIR’s Atty. Venus Axalan:  “We have relaxed the requirements for TIN.  Every co-op is now allowed online access.  It is currently off because the TIN was abused . . . it was being sold.  But that is the only solution we have from our Client Support System Group to open it exclusively for co-ops.  In the meantime, we relaxed it.  Even a cedula (Residence Certificate) will now be accepted get a TIN.  This has been since 2010, ten years ago.  Had you complied in 2010, all your members would have TIN by now.  Co-ops can go online but there are some documentary requirements to be given access to the online TIN distribution.  It was opened just for co-ops.”

Another route co-ops may take is contained in Revenue Memorandum Circular 102-2016 Section, 3 which allows Residence Certificate or cedula: “Co-ops, with authorization from members, may apply for the issuance of TIN in behalf of its members, by collating the members’ accomplished BIR Form 1904 plus government-issued ID, birth certificate, cedula which show 1) name, 2) address, and 3) birthdate.”

However, the BIR officials stressed that co-ops, with such delegated authority, must ensure that no individual will have multiple TINs or they will pay P1,000 for the cancellation of TIN.

Atty. Delos Santos: “BIR has also issued the Memo circular authorizing co-ops to apply for TIN for and in behalf of their members.  Co-ops just need to get an authorization letter signed by the member with all the documentary requirements attached including Form 1904 and any government-issued ID.  This will be opened to co-ops with many members.  “

Rep. Canama opined: “Personally, I am not in favor of the TIN requirement.  But it is in the rules.  So we will need to talk how to make it easier for co-ops.  After all, the Duterte Administration is advocating ease of doing business.  But in the meantime, co-ops must comply.  I hope, ultimately this will be removed.  This is not developmental because it discourages would-be members from joining the co-op.” 

In the post meeting, NATCCO Network Vice Chairperson Antonio Aranas revealed that at an earlier meeting, a reliable source said the BIR needs the TIN to charge individual income tax to the members from the income they derived from dividends and interest income. 

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