By Edu Punay (The Philippine Star) |
Updated September 10, 2014 - 12:00am
MANILA, Philippines - The Supreme
Court (SC) stopped yesterday the government from implementing its new policy
requiring companies to fully disclose names and tax records of their
shareholders.
The High Court issued a temporary
restraining order (TRO) on the implementation of a key provision in Revenue
Regulation (RR) 01-14 of the Department of Finance, Revenue Memorandum Circular
(RMC) 5-2014 of the Bureau of Internal Revenue and the entire Memorandum
Circular 10-2014 of the Securities and Exchange Commission.
The said order requires 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.
The order also imposes penalties under
the National Internal Revenue Code on violations.
The TRO is “effective immediately and
until further orders” from the High Court.
The SC granted the immediate relief
sought in the petition filed last Sept. 4 by the Philippine Stock Exchange
(PSE), Bankers Association of the Philippines (BAP), Fund Managers Association
of the Philippines (FMAP), Marmon Holding Inc., Philippine Association of
Securities Brokers and Dealers Inc. (PASBDI) and Trust Officers Association of
the Philippines (TOAP).
It also directed the DOF, BIR and SEC
to comment on the petition within 10 days from receipt of notice.
In their 58-page petition, the
business organizations asked the High Court to void the assailed orders.
They argued that the respondents
violated their constitutional right to due process and right to privacy in
issuing the orders.
They added that the SEC has no
authority to issue circulars implementing or interpreting tax laws or
issuances.
Lastly, they alleged that the assailed
orders essentially amended Sec. 43.1 of the Securities Regulations Code as they
prohibit the use of “PCD nominee” as the payee of the dividend payments and
shareholder of shares in listed firms.
The petitioners said this violated the
constitutional principle of separation of powers since only Congress has the
power to amend laws.
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.
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