Privileges of Cooperatives.
Section 5
SEC. 5. Privileges of Cooperatives. — Cooperatives shall enjoy the following privileges: (a) Exemption from income taxes and sales taxes provided that a substantial portion of the net income of the cooperative is returned to members in the form of interests and/or patronage refunds: Provided, further, That for income tax purposes, non-agricultural cooperatives shall be exempt for a period of five (5) years and agricultural cooperatives for a period of ten (10) years reckoned from the date of registration with the Department of Local Government and Community Development: Provided, finally, That the taxable income shall mean that portion of the cooperative's income after deducting the interest paid to members and patronage refunds; (b) In areas where appropriate cooperatives exist, the preferential right to supply rice, corn and other grains, fish and other marine products, meat, eggs, milk, vegetables, tobacco and other agricultural commodities produced by members of the cooperatives concerned to State Agencies administering price stabilization programs; and (c) In appropriate cases, exemption from the application of the Minimum Wage Law upon the recommendation of the Bureau of Cooperatives Development subject to the approval of the Secretary of Labor.