Coop Chamber backs LOA suspension, seeks Senate probe

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By Mariela Angella Oladive

The Philippine Chamber of Cooperatives, Inc. (Coop Chamber) has expressed support for the Department of Finance and the Bureau of Internal Revenue’s (BIR) suspension of the issuance of Letters of Authority (LOA), saying the move responds to complaints of audit-related harassment against cooperatives and small enterprises.

In a Nov. 25 letter, the Coop Chamber backed the call of Senators Erwin Tulfo and JV Ejercito for a Senate Blue Ribbon Committee inquiry into the alleged misuse of LOAs.

The organization said the investigation is necessary to address systemic audit practices and preserve the legitimacy of Certificates of Tax Exemption (CTE).

“The suspension of LOAs is only the first step. Cooperatives must be shielded from arbitrary audits that divert resources away from scholarships, livelihood programs, and community development,” Coop Chamber Chairperson Noel Raboy said in a statement.

Raboy added that unwarranted audits weaken confidence in the cooperative system.

“Cooperatives are not corporations. They are pillars of inclusive growth and must be treated distinctly under the Cooperative Code,” he said.

The Coop Chamber is pushing for four key actions:

• An immediate Senate investigation into LOA misuse;
• Regulation of LOA issuance with safeguards for cooperatives;
• Protection of CTEs from arbitrary suspension; and
• Institutional reforms in the BIR to prevent harassment and corruption.

Coop Chamber Regional Governor for Western Visayas Mary Jane Ganarias said the regional chamber supports the national directive, noting that the suspension provides relief for primary cooperatives.

“The suspension of LOAs is a big help to primary cooperatives. If a letter of compliance is issued by the BIR, they cannot refuse it. This affects funds of the primary coops, and can lead to additional taxes and fees that disrupt operations—especially for coops dealing with delinquency or liquidity issues,” she told Daily Guardian.

She noted that while members of the regional chamber have not recently reported LOA-related issues, some cooperatives in the region encountered concerns in previous years.

Most of the concerns involved incomplete documentary requirements or misinterpretation of BIR guidelines on tax exemptions, which led to audit penalties and compliance problems.

To help member-cooperatives, Ganarias said the chamber consolidates audit issues from organizations in the region and holds workshops and consultations to improve compliance.

She said the chamber is prepared to participate if the Senate requests inputs.

The Coop Chamber in Region 6 currently has an estimated 50 member-cooperatives, and with ongoing compliance applications, the number is projected to exceed 100, excluding Negros Occidental.