Revenue Regulation 01-14 requires all withholding agents to submit an "alphalist" of payees on income payments to creditable and final withholding taxes and prohibit the lumping into a single amount and account of various income payments and taxes withheld.
The Philippine Stocks Exchange together with the Bankers Association of the Philippines and several other business groups are petitioning the Supreme Court to declare the ruling unconstitutional. They were successful in getting a temporary restraining order.The Supreme Court ordered the BIR, SCC and Department of Finance to comment on the petition.
Petitioners argue that the regulations jeopardize the privacy of individual investors and market stability, they add complying with the regulation would violate data privacy act. The current script was or are electronic system is settled by the Philippine Central Depository or PCD. The system ensures the efficient transfer of shares and protects investors from unauthorized third parties since it disallows access to information beyond the PCD nominee.
Petitioners said complying with the regulation meant violating the data privacy act while non-compliance mean sanction by the SCC. Both have criminal penalties on them. In a letter to the BIR and Department of Finance earlier this year the petitioners claim that RR01-14 increases cost of doing business specially for non-resident portfolio investors will have to hire accredited tax lawyers to process their tin applications.
In an interview with Bloomberg Kim Henares, the BIR Commissioner said "Why complain if they had reported it when they should have. They should be paying taxes on it." She said that it makes her think that the right taxes haven't been paid by investors and issuers. For now, the case is still in court. As the business community waits to see what's next.
Acknowledgement:
Content Credit: ANC/Melissa Gecolea
Image Credit: tomtax.blogspot.com
Content Credit: ANC/Melissa Gecolea
Image Credit: tomtax.blogspot.com
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