Revenue Memorandum Circular No. 90-2026

This Circular is issued to clarify and provide guidance on whether the “Certificate of Compliance” issued by the Cooperatives and Social Enterprise Authority (CSEA) of the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) can be accepted for the issuance of Certificate of Tax Exemption (CTE) in lieu og the “Certificate of Good Standing” issued by the Cooperative Development Authority (CDA) as required under Revenue Memorandum Order (RMO) No. 76-2010, which prescribes the policies and guidelines in the issuance of CTE of cooperatives.

Purpose of Certificate of Compliance

The “Certificate of Good Standing” issued by the CDS is among the documents required to be attached to the letter-application for the issuance of a CTE in accordance with Section 13 of the Joint Rules. The same Section further states that no application for tax exemption shall be issued in the absence thereof.

The “Certificate of Good Standing” issued by the CDA served as proof that the cooperative has complied with the mandatory requirements udner Republic Act (RA) No. 9520, or the Philippine Cooperative Code of 2008, and relevant issuances, and is thus eligible to avail the incentives and privileges under the Joint Rules, in relation to Articles 60 and 61 of the said law.

The CDA now issued a “Certificate of Compliance”, instead of a “Certificate of Good Standing”, for specific purposes incuding the availment of the incentives and privileges set forth under the Joint Rules, in relation to Articles 60 and 61 of RA No. 9520.

Creation of the CSEA

Section 2 (k) of Article of RA No. 11054, otherwise known as the “Organic Law for the Bangsamoro Autonomous Region in Muslim Mindanao”, empowered the Bangsamoro Government (BG) to exercise authority over cooperatives and social entrepreneurship. Pursuant thereto, the BG enacted Bangsamoro Autonomy Act No. 13 or the “Bangsamoro Administrative Code” (BAC).

Under Section 57 of Item H, Chapter 3 (Attached Agencies and Offices) of the BAC, the CSEA was created to act as the primary entity to promote the viability and growth of Bangsamoro cooperatives and social enterprises in the Bangsamoro region. The same Section likewise states that the CSEA shall be the sole agency of the BG that registers cooperatives and social enterprises. Further, under Section 63 of the Item H, Chapter 3 if the BAC,the Cooperative Development Division of the CSEA is mandated to “process applications for and thereafter issue Certificates of Registration, and Certificate of Compliance, when warranted”.

Based on the foregoing, the CSEA serves as the agency that administers and supervises the affairs of cooperatives in the BARMM, including registration and issuance of “Certificate of Compliance”. Eventually, the CSEA was recognized by the CDA as their counterpart agency for the registration, regulation, and development of BARMM cooperatives.

Applicability of RMO No. 76-2010 on CSEA-registered Cooperatives

It has been argued that the cooperatives in the BARMM were initally registered with the CDA but are now under CSEA. Hence, the “Certificate of Compliance” from CSEA should be accepted as sufficient compliance for the issuance of a CTE. However, it is a basic legal principle that a grant of tax exemption is never presumed. Any reduction or diminution thereof with respect to its mode or its rate, must be strictly construedm and the same must be coached in clear and unmistakeable terms in order that it may be applied.

The provisions of RA No. 9520 cannot be automatically applied to CSEA-registered cooperatives. Under the BAC or any existing BARMM legislation, there are no provisions on the following which serve as counterparts of RA No. 9520:

• a. Juridical personality under Article 16;
• b. General requirements for registration under articles 10, 11, 14, and 15;
• c. Registration procedures under Articles 16 and 17;
• d. Tax exemption under Articles 60 and 61; and
• e. Other previliges under Article 62.

Assuming that the BG enacts a Cooperative Code which provides for the grant of tax exemptions similar to those under RA No. 9520, the said grant will fall within the express limitations on the BG’s taxing power, as provided under Section 9 (a) and (k) of Article XII of RA No. 11054, which states that the taxing power of the BG shall nor extend to Income tax (except when levied on banks and other financial institutions) and taxes, fees, or charges on countryside and barangay business enterprises and cooperatives duly registered under RA No. 6810, otherwise known as the “Magna Carta for Countryside and Barangay Business Enterprises,” and RA No. 6938, otherwise known as the “Cooperative Code of the Philippines as amended.

Furthermore, RA Nos. 6939, 9520, and 11364 all provide that the CDA has a sole supervision and jurisdiction over all types and categories of cooperatives in the country.

In conclusion, only the “Certficate of Good Standing” (now “Certificate of Compliance”) duly issued by the CDA will be recognized for purposes of availing the tax incentives by cooperatives under RA No. 9520. In the absence of an appropriate legislation expressly including the CSEA-registered cooperatives located in the BARMM within the coverage of the tax exemptions under RA No. 9520, said cooperatives cannot avail of the same tax incentives by submitting a “Certificate of Compliance” issued by CSEA.