SC TRO: Like lawyers, docs need not bare fees to BIR

MANILA, Philippines–The Supreme Court has extended to doctors the temporary restraining order (TRO) it issued on the Bureau of Internal Revenue (BIR) circular that required self-employed professionals to reveal their fees for purposes of taxation.

The high tribunal issued the original order on April 22 on the BIR Revenue Regulation 4-2014 upon the petition of the Integrated Bar of the Philippines (IBP). This time, the court extended the TRO to doctors as well, following a similar petition filed by the Philippine College of Physicians (PCP).

At a press conference, Supreme Court spokesman Theodore Te said the court, in its en banc meeting Tuesday, allowed the petition for intervention filed by the PCP.

Disclose fees, client info

The Pasig City-based PCP, founded in the 1950s, is the umbrella group of various organizations of internal medicine practitioners in the country.

On April 8, the IBP asked the high court to void the BIR move requiring self-employed professionals to disclose their service fees and client information.

The IBP questioned the constitutionality of the measure and said that it “encroaches upon the court’s exclusive authority and jurisdiction to regulate and prescribe rules” for the legal profession.

On April 22, the court issued the TRO that stopped the BIR from compelling lawyers to disclose how much they charge their clients.

The TRO came two weeks after the regulation took effect and covered only lawyers because they were the only group that questioned the BIR move.

On May 2, the PCP followed suit.

Move vs self-employed

BIR Revenue Regulation No. 4-2014, issued on March 21, directed professionals to register their official appointment books containing names and tax identification numbers (TIN) “to promote transparency and eradicate tax evasion among [the ranks of the] self-employed.”

The measure also required professionals to submit affidavits indicating the rates, manners of billing and factors considered “in determining their service fees” upon registration each year.

The self-employed would also be required to register their accounts and appointment books before using these ledgers. The official appointment books should contain the names of their clients, and the dates and times of their respective meetings.

Compromise

“They are likewise obliged to register their sales invoices and official receipts before using them in any transaction,” the revenue agency said.

In cases where no fees are charged, professionals are still required to issue receipts showing the 100-percent discount for their clients “as substantiation of the pro bono” service.

The new regulation was a compromise to a previous proposal of the BIR, where it required doctors, lawyers and other professionals to put up posters in their places of businesses showing their rates to their clients.

A silver lining

The PCP lauded the court move.

“We see a silver lining here. We, the medical doctors have taken the high road toward developing a culture of change to help the government’s advocacy in paying the right taxes and be responsible citizens. We assure the government that we will continue to lead our ranks in practicing honesty and transparency,” Dr. Anthony Leachon, PCP president, said in a statement.

“On behalf of the medical doctors, I must thank Commissioner Kim Henares in providing us the support to comply with our obligation and pave the way for a partnership that restores pride and nobility in the medical profession. We are humbled by the SC decision, finding the PCP position meritorious and justifiable,” Leachon said.

The BIR has been relentless in its pursuit of tax-evading professionals. Part of their efforts to crack down on tax evaders is the “name-and-shame” campaign.

In a newspaper ad published in July last year, the Department of Finance said income tax returns showed that public school teachers were making more money than half of the doctors, lawyers and accountants in Makati City.–With a report from Inquirer Research

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