Biz groups question BIR policy before SC

MANILA, Philippines - Business organizations have sought relief from the Supreme Court (SC) against government’s policy requiring companies to disclose their shareholders.

In a 58-page petition filed last Thursday, the Philippine Stock Exchange (PSE), Bankers Association of the Philippines (BAP) and other business organizations asked the high court to issue a temporary restraining order enjoining the implementation of the new policy.

Petitioners specifically assailed Revenue Regulation (RR) 01-14 of the Department of Finance, Revenue Memorandum Circular (RMC) No. 5-2014 of the Bureau of Internal Revenue and Memorandum Circular No. 10 - 2014 of the Securities and Exchange Commission.

The said orders require the submission of the tax identification number of the shareholders of companies listed alphabetically (alphalist) with their complete names and corresponding amounts of income and withholding tax. They also impose penalties under the National Internal Revenue Code on violations.

The BIR said it needed such information to build a database it can use to improve analysis and enforcement of its tax assessment and collection duties.

But petitioners argued that the agencies violated their constitutional right to due process in issuing the orders.

 “Respondents issued the questioned regulations without giving any notice to the affected market participants and conducting any public hearing,” they argued in the petition filed through top law firm Romulo, Mabanta, Buenaventura, Sayoc & De Los Angeles law offices.

The groups also claimed violation of their right to privacy.

 “The questioned regulations require the disclosure of senstt1ve personal information regarding an investor to a private third party, not to a government or public authority, do not provide a mechanism to protect sensitive personal information relating to each disclosed investor and violate the express provisions of banking laws and regulations,” they pointed out.