The Supreme Court (SC) has invalidated a Bureau of Internal Revenue (BIR) regulation requiring self-employed professionals to submit their rates and register appointment books to monitor their tax compliance, saying it violates individual rights to privacy.
Senior Associate Justice Marvic Leonen authored the landmark decision released on Friday, May 31, in which the SC voided portions of BIR Revenue Regulation (RR) No. 4-2014, or the Guidelines and Policies for the Monitoring of Service Fees of Professionals.
The SC ruled that the regulation infringed on the privacy rights of professionals and their clients.
Implemented on March 3, 2014, the regulation mandated self-employed professionals to submit an affidavit detailing their rates and billing methods, register their appointment books, and issue BIR-registered receipts for pro bono cases.
The SC had previously issued a temporary restraining order against this policy on April 22, 2014, following petitions from professional associations challenging its constitutionality.
It stated that these requirements exceeded the BIR’s authority, as they were irrelevant to its primary duty of tax assessment and collection.
Further, the Court emphasized that such regulations breached the privacy of professionals and their clients, who have a reasonable expectation of confidentiality in their appointments and interactions.
The decision highlighted that while names and appointment dates alone may appear harmless, compiling this information could reveal patterns of behavior, potentially disclosing private details. This breach of confidentiality conflicts with ethical standards in professional practices.
However, the SC upheld the BIR’s authority to require professionals to register their books of accounts and issue receipts for pro bono services. These measures were deemed valid for ensuring proper tax assessment without violating privacy or ethical standards.
Editor’s Note: This is an updated article. Originally posted with the headline “Primacy of privacy: Supreme Court voids BIR rule on professionals to submit appointment books.”
