By Jenniffer B. Austria | Sep. 05, 2014 at 11:01pm [ manilastandardtoday.com ]
Six business groups on Friday asked the Supreme Court to issue a temporary restraining order against the Bureau of Internal Revenue and the Securities and Exchange Commission from forcing listed companies to disclose in alphabetical list all stockholders receiving dividends.
The Philippine Stock Exchange, the Bankers Association of the Philippines, Philippine Association of Securities Brokers and Dealers Inc., Fund Managers Association of the Philippines, Trust Officers Association of the Philippines and Marmon Holdings Inc. also asked the high tribunal to declare Revenue Regulations No. 01-14 and SEC Memorandum Circular No. 10 Series of 2014 null and void.
“Unless the Supreme Court immediately issues a temporary restraining order and/or writ of preliminary injunction, petitioners and their officers will be in situation where they risk administrative sanctions and criminal prosecution whether or not they comply with the questioned regulations,” the groups said.
The petitioners said if they complied with the questioned rulings, their clients/investors could hold them criminally liable for violating the confidentiality provisions under the General Banking Law.
They said if they did not comply with the new regulations, they risked being administratively investigated and/or criminally prosecuted for violation of various provisions of the Tax Code and the Securities Regulation Code.
BIR Commissioner Kim Henares said the ruling should have been implemented long before and the industry’s reaction has only strengthened her resolve to go after tax cheats.
“Why would you complain if in the first place, you have reported it when you should be reporting it and when you should be paying taxes on it,” Henares said in a Sept. 3 interview.
“So, you’re complaining now makes me think that you haven’t been paying the right tax,” she said, referring to investors and issuers.
The BIR in January this year issued RR 1-2014, which required withholding agents to submit an alphabetical list of payees on income payment, subject to creditable and final withholding taxes. The circular requires that withholding agents indicate in the alphalist the tax identification numbers, complete names, income amount and tax withheld from its payees.
SEC also issued MC 10-14 to compel other market participants, such as broker dealers and other depository account holders, to provide the information needed by listed companies to comply with the questioned revenue regulations.
The petitioner said RR 01-14 and the SEC Memorandum Circular No. 10 Series of 2014 were “issued without any jurisdiction or with grave discretion amounting to lack of excess of jurisdiction.”
“Respondents, in the guise of tax administration, have jeopardized not only the stability of the Philippine capital market but also the liberty, properties, privacy, and security of the market participants, which includes the petitioners,” the groups said. With Bloomberg