THE Philippine Chamber of Cooperatives (PH Coop) on Friday assailed a Bureau of Internal Revenue (BIR) policy mandating that all individual members of a cooperative must possess a Taxpayer Identification Number (TIN) for the organization to avail tax exemption privileges.
‘We challenge the validity of these revenue and random circles before the Supreme Court speech today, meanwhile, arguing that these issuances unlawfully restrict the tax exemption and privileges granted cooperatives under a cooperative code,’ PH Coop Founding Chairman Noel D. Raboy said during a news conference in Manila. ‘And, lastly, it is the policy of the state to foster the growth and development of cooperatives; and its autonomy and independence must always be upheld as an enshrined in the Constitution.’
Raboy said PH Coop views the BIR requirement as an undue and unnecessary burden and a barrier that effectively negates the tax-exempt status granted by the Philippine Cooperative Code of 2008 or Republic Act 9520.
In a collective decision, Raboy said the PH Coop Chamber has filed a petition for certiorari before the Supreme Court to declare the BIR requirement null and void.
He added the core of the cooperatives’ argument is that the BIR, through various Revenue Memorandum Circulars, is overstepping its authority by adding a requirement not explicitly found in the Philippine Cooperative Code.
PH Coop Secretary General Edwin A. Bustillos said the code grants tax-exempt privileges to cooperatives as a means for the state to support their development, particularly for poverty alleviation. The TIN requirement, which is difficult for many marginalized members to comply with, hinders thousands of cooperatives from securing their Certificate of Tax Exemption (CTE), effectively forcing them to pay taxes, Bustillos added.
Raboy further argued that many cooperative members come from the informal sector or the marginalized and poor sectors who do not have a TIN, as their income is often below the taxable threshold. Forcing them to secure one is seen as an impractical and discouraging administrative burden, he added.
Raboy said PH Coop argues that the BIR’s circulars are ultra vires or beyond the scope of legal power, because a revenue-regulating body cannot amend or override the provisions of a legislative act (the Cooperative Code).
Nevertheless, the BIR has remained firm on the requirement, citing Section 236 of the National Internal Revenue Code (NIRC), which generally requires a TIN for all persons required to file a tax return.
In an effort to provide a temporary solution, the BIR issued Revenue Memorandum Circular (RMC) 038-2025, which includes a no delay in the issuance of a CTE, submission of sworn affidavit detailing the justifiable reasons for non-compliance and a ‘compliance undertaking’ that the cooperative will comply with the TIN requirement within a nine-month period and penalty, and a penalty for failure to comply with the undertaking within the grace period.
While the circular provides a temporary reprieve from immediate denial, Bustillos said cooperative leaders argue that it is not a long-term solution. He added they maintain that the underlying requirement remains a structural barrier to growth and a potential window for corruption, particularly concerning the high monetary penalties for non-compliance.
Bustillos said the issue has also been raised in the Senate, with legislative inquiries led by senators such as Senator Sherwin T. Gatchalian, who has openly supported the cooperatives’ position. The Senate has repeatedly urged the BIR to suspend and amend the stringent TIN requirement.
Cooperative leaders also lament the perceived lack of genuine consultation from government regulatory bodies like the Cooperative Development Authority regarding the issuance of various circulars. They point out that RMC 038-2025 and similar issuances were made without fulfilling the mandate for sector-wide consultation, which is required by law for any new policies affecting cooperatives.
Bustillos said filing of the certiorari petition signals that the cooperative movement is maximizing with the administrative and legislative routes and a firm resolve to seek a definitive legal ruling from the highest court to protect the tax-exempt status of Philippine cooperatives.