Good Harvest
By Carl Angelo Cabusas
AGRICULTURE has been the backbone of humanity since the ancient times. When humans learned how to farm, this ended
the nomadism of our ancestors and sparked civilization. Where there are resources to farm, civilizations flourished.
Cities that were in the center of all these resources became centers for trade and industry. Today, humanity has
advanced so far that farming has taken a back side and sadly, was less prioritized by some countries. However, there
is still hope as our government is actively doing its part to improve the agriculture sector of our country.
Revenue Regulation (RR) 19-2021 is one of the latest issuances of the BIR, which implements the tax incentive and exemption
provisions of Republic Act (RA) 11321 also known as "Sagip Saka Act."
Let us breakdown these tax incentives and exemption provisions:
A. Coverage. The RR covers income tax exemption and exemption from donor's tax of donations made to Accredited Farmers and
Fisherfolk Enterprise engaged in agriculture and fishery-related economic activities.
B. Income tax exemption. All Accredited Farmers and Fisherfolk Enterprise may be exempt from income tax on income directly
arising from the operations of the enterprise provided they are registered as Barangay Micro-Business Enterprise (BMBE).
This exemption is only available during the period of effectivity of the certificate of authority issued by the Department
of Trade and Industry to such BMBE.
C. Cooperatives' income tax exemption. Farmers' and Fisherfolk Cooperatives may also avail of the tax exemption above upon
satisfying the following criteria:
1. The accredited business entity or enterprise must be among the intended beneficiaries under
Section 5 of the implementing rules and regulations (IRR) of Republic Act 11321.
2. Must have total assets of not more than P3 million, net of the land on which the particular
business entity's office plant and equipment are situated.
D. Donor's tax exemption. Donations of real and personal properties to accredited farmers and fisherfolk enterprise shall be
exempt from donor's tax provided that:
1. The donee is an accredited farmers and fisherfolk enterprise as certified by the Department of Agriculture.
2. The donee is among the proponent groups or beneficiaries of "The Farmers and Fisherfolk Enterprise Development Program," as certified by the Department of Agriculture-Regional Sagip Saka-Program Management Committee (SS-PMC).
3. The donation is made for the accomplishment of the Farmers and Fisherfolk Enterprise Development Program, consistent with its objectives to develop enterprises for farmers and fisherfolk toward a sustainable modern agriculture and food security.
4. The application for exemption from donor's tax shall comply with the guidelines in the processing of requests for rulings set forth in Revenue Memorandum Order (RMO) 9-2014 and shall be filed with the Law and Legislative Division, Room 709, 7th Floor, Bureau of Internal Revenue (BIR) National Office, Diliman, Quezon City, together with the following documentary requirements:
1. Original/certified true copy of the certification from the Department of Agriculture that
the donee is an accredited farmer and fisherfolk enterprise;
2. Original/certified true copy of the certification from the Department of
Agriculture-Regional Sagip Saka-Program Management Committee (SS-PMC) that the donee is
among the proponent groups or beneficiaries of "The Farmers and Fisherfolk
Enterprise Development Program";
3. Tax identification number (TIN) of donor and donee;
4. Original/certified true copy of the duly notarized deed of donation;
5. Original/certified true copy of the title and tax declaration if the donation consists of
real property and/or certified true copy of proof of receipt of donation of
personal property;
With these incentives and exemptions, let us hope that the agricultural sector of our country improves well, and our farmers become more equipped with the tools and funding they need to serve as the backbone of our country. We are also expecting the IRR which pertains to the direct purchasing of the government from accredited farmer and fisherfolk enterprises. This would help in the lowering of prices of agricultural produce and help farmers get more benefit from their work. We hope that this is just the start of our agricultural boom and that in the future, more people can enjoy lower prices of food on their table while farmers the returns that they really deserve.
Carl Angelo C. Cabusas, is the audit and digital transformation director of Paguio, Dumayas & Associates, CPAs (PDAC) - PrimeGlobal Philippines. The opinion of the writer does not
reflect in any way the opinion of PDAC. This Article was published in the newspaper Manila Times under ACPAPP Corner on Dec. 29, 2021.
Source: Good Harvest - Manila Times