Bureau of Local Government Finance Opinion

October 4, 2000 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mr. Burt B. Favorito Chairman, DPWH COMCO 2nd St., Port Area Manila Sir : This refers to your letter dated August 29, 2000 requesting opinion whether the DPWH Central Office Multi-Purpose Cooperative (COMCO) can be refunded the amount paid to the City of Manila in view of the express exemption given to cooperatives under the Local Government Code of 1991 (LGC) from paying fees and other incidental expenses. Representations are made that COMCO was duly registered with the Cooperative Development Authority (CDA) providing, among others, loan assistance and canteen services for DPWH employees. COMCO applied for Mayor's permit for CY 2000 in the City of Manila and paid the various fees in the total amount of P20,438.85. Under BLGF Memorandum Circular No. 02-97 dated March 18, 1997, the CDA opined that cooperatives duly registered under RA 6938 that transact business solely with its members are exempt from obtaining the Mayor's permit. However, duly registered cooperatives which transact business with NON-MEMBERS are required to obtain said Mayor's permit but are exempt from paying the fee corresponding to such permit. CEDHTa It was emphasized, however, that said cooperatives are still liable to the payment of service charges or rentals for the use of property and equipment or public utilities owned by the local government such as charges for actual consumption of water, electric power, toll fees for the use of public roads and bridges and the like. Moreover, enclosed for your information and ready reference is a copy of the 2nd Indorsement dated February 24, 1998 of this Bureau addressed thru the City Treasurer, to the Chief, Business Permits and Licensing Office, Caloocan City, relative to the assessment of business taxes and fees on the Bayanihan sa Kaunlaran of Sambayanan (BAKAS) Cooperative Development, Inc. wherein it was found that the said fees being imposed are by nature, service charges as compensation for services actually rendered by the local government unit. Accordingly, COMCO may file with the City Treasurer of Manila a claim for refund or tax credit on the fees paid thereat which are covered by the exemption given to cooperatives. We hope that this will help clarify matters. Very truly yours, (SGD.) BENJAMIN A. GERONIMO Executive Director <http://www.blgf.gov.ph/downloads/opinion/localtax/2000/a2000-0904.pdf> last visited on October 2, 2013.