PROPOSED ORDINANCE NO.

___-18: PRESCRIBING THE STANDARD PAYMENTS AND REGULATORY

REQUIREMENTS FOR ISSUANCE OF BUSINESS PERMITS TO ALL DULY-REGISTERED AND LEGITIMATE
PRIMARY COOPERATIVES, COOPERATIVE BRANCHES AND COOPERATIVE SATELLITE OFFICES
OPERATING WITHIN THE CITY OF MASBATE

EXPLANATORY NOTE

The 1987 Constitution provides in Article X Section 5 that: "Sec. 5. Each local government unit shall
have the power to create its own sources of revenues and to levy taxes, fees and charges subject to such
guidelines and limitations as the Congress may provide, consistent with the basic policy of local autonomy. Such
taxes, fees and charges shall accrue exclusively to the local government."
Section 129, Title I, Chapter I of Book II of the Local Government Code of 1991 or (LGC of 1991)
provides that each local government unit shall exercise its power to create its own sources of revenue and to levy
taxes, fees, and charges subject to the provisions herein, consistent with the basic policy of local autonomy.
Republic Act 9520 (RA 9520) or otherwise known as the, “Philippine Cooperative Code of 2208”
provides that it is the declared policy of the State to foster the creation and growth of cooperatives as a practical
vehicle for promoting self-reliance and harnessing people power towards the attainment of economic
development and social justice. The State shall encourage the private sector to undertake the actual formation
and organization of cooperatives and shall create an atmosphere that is conducive to the growth and
development of these cooperatives.
The basis for exemption from local taxes, fees and charges of qualified cooperatives is RA 9520, a
special law on cooperatives. While it is true that local government units enjoy fiscal autonomy, this is not absolute
since this is subject to the limitations imposed by law.
RA 9520 emphasized the exemption of duly registered cooperatives from payment of applicable fees,
taxes and charges.
The Department of the Interior and Local Government (DILG) Memorandum Circular No. 2010-120
dated October 20, 2010 emphasized the exemption of duly registered cooperatives from payment of applicable
fees, taxes and charges BUT subject to compliance with the Bureau of Local Government Finance of the
Department of Finance (BLGF) Memorandum Circular No. 31-2009 dated October 7, 2009, which prescribes
that all cooperatives transacting business with both members and non-members are still required to:
a) Obtain or secure a Mayor's Permit and pay the commensurate cost of regulation, inspection and
surveillance of the operation of its business in amount not exceeding One Thousand Pesos (₱1,000.00);

b) Secure a Community Tax Certificate as a juridical entity and pay the basic tax of Five Hundred Pesos
(₱500.00); and

c) Pay service charges or rentals for the use of property and equipment or public utilities owned by the
local government such as charges for actual water consumption, electric power, toll fees for the use of public
roads and bridges, and the like.
The proposed measure seeks to further enhance the general welfare of the City and its constituents
pursuant to the general welfare clause of the Local Government Code of 1991.
It is for this reason that the enactment of this Proposed Ordinance is earnestly sought.