MANILA, Philippines - Government lawyers have asked the Supreme Court to lift its order preventing the Bureau of Internal Revenue from requiring the local banking and securities industries to disclose an alphabetical list of investors receiving income payments and dividends.
The temporary restraining order was in response to the petition filed by the Philippine Stock Exchange, the Bankers Association of the Philippines, the Philippine Association of Securities Brokers and Dealers, the Fund Management Association of the Philippines, the Trust Officers Association of the Philippines and Marmon Holdings Inc.
The Office of the Solicitor General (OSG) argued that the submission of the alpha list has always been a requirement under the National Internal Revenue Code (NIRC) since the time of manual alphabetical listing.
It cited Sec. 245 (i) of the NIRC, which specifically mandates the Commissioner of Internal Revenue to specify, prescribe or define “the manner in which tax returns, information and reports shall be prepared and reported and the tax collected and paid, as well as the conditions under which evidence of payment shall be furnished the taxpayer, and the preparation and publication of tax statistics.”
Government lawyers also maintained that Internal Revenue commissioner Kim S. Henares, one of the respondents to the case, was merely exercising the power granted her under the law.
They pointed out that the questioned regulations are not the first issuances on how tax returns, information and reports are to be prepared and submitted to the BIR, because these are mere amendments to Revenue Regulation No. 2-98, as amended by RR 10-2008, both of which are interpretative of and based on Sec. 245 (i) of the NIRC.
Both also require the submission of an alphabetical list of employees and list of payees on income payments subject to creditable and final withholding taxes which are required to be attached as integral part of the Annual Information Returns and Monthly Remittance Returns, the OSG said.
In addition, the OSG questioned the petitioners’ claim that the regulations were “impossible to comply with” and would expose issuers with legal liabilty, showing evidence that other entities, like the Philippine Dealing Holding Corp. & Subsidiaries (PDS) and the brokers of Pacific Online Systems Corp. (POSC), have confirmed ability to comply with the regulations.
The OSG pointed out that the mere fact that companies were already complying with the said regulations prior to the issuance of the TRO shows that the petitioners’ concerns were unwarranted and even unrepresentative of the majority of the market players.