Requiring professionals to submit appointment books violates right to privacy —SC

The Supreme Court has invalidated a regulation of the Bureau of Internal Revenue (BIR) that requires self-employed professionals to submit their rates and register appointment books to monitor their tax compliance.

In a 51-page decision promulgated in April 2023, the SC En Banc granted a consolidated petition and declared void portions of Section 2(1) and 2(2) of the BIR Revenue Regulation (RR) No. 4-2014 for violating the right to privacy of professionals and their clients.

The Court also enjoined the BIR and the Department of Finance from implementing the provisions.

RR No. 4-2014 required all self-employed professionals to submit an affidavit indicating the rates, manner of billing, and the factors that they consider in determining service fees; register their books of account and appointment books on the names of their clients as well as their meeting date and time; and issue a BIR-registered receipt showing the discount for pro bono cases.

“The appointment books of professionals, such as lawyers, doctors, accountants, or dentists, contain their clients' names and the date and time of consultation-information over which they reasonably expect privacy,” the SC said.

“Mandating the registration of appointment books to monitor tax compliance would be an unreasonable State intrusion into their right to privacy,” it added.

The case stemmed from the petition filed by several associations who asked the Court to declare as unconstitutional the BIR regulation.

In April 2014, the SC issued a temporary restraining order against the implementation of the RR No. 4-2014.  

In its ruling, the Court found that the requirement to submit a schedule of fees exceeded the BIR’s authority for being irrelevant in its primary duty.

“While the BIR may collect information, this is limited to concluded transactions, which are taxable services. The required affidavit of schedule of fees, however, is only indicative and does not bind professionals, who can ultimately charge higher or lower,” the SC said.

Meanwhile, the Court upheld the requirement to register books of accounts as it falls under the scope of the BIR’s authority. It also upheld the requirement to issue receipts for pro-bono services.—AOL, GMA Integrated News