BIR Ruling [DA-680-99]

December 10, 1999 BIR RULING [DA-680-99] Mr. Danilo Lihaylihay 25 A. Kaunlaran Street IBP Road, Batasan Hills Quezon City S i r : This refers to your letter dated September 29, 1999 requesting access to information anent the internal revenue tax case of General Milling for taxable years from 1991 until 1993, which appeared in one of leading newspapers last August 23, 1999. prcd Relative to your request, you invoked Sec. 7, Article III of the 1987 Philippine Constitution, stating "SEC. 7. The right of the people to information on matters of public concern shall be recognized. Access to official records, or decision, as well as to government research data used as basis for policy development, shall be afforded the citizen, subject to such limitations as may be provided by law." that the nature of General Milling's Tax Case is undeniably endowed with public interest and involves a matter of public policy, in the same manner our Supreme Court has held in two recent cases, to wit: "1. In G.R. No. 1046781, July 10, 1998 CALTEX (PHILIPPINES), INC., vs. COURT OF APPEALS, ET AL., where Caltex was assessed ad valorem duties, it was held that to allow the protestations of petitioner Caltex would necessarily prejudice public interest. cdll "2. In G.R. No. 106588, March 24, 1997 RAUL H. SESBREO vs. CENTRAL BOARD OF ASSESSMENT APPEALS, ET AL., where our court held that depriving the government of back taxes which ought to have been paid will necessarily prejudice the public interest." that you also invoked the fact of the State's recognition that the people are entitled to information on matters of public concern and thus are expressly granted access to official records, as well as documents of official acts, or transactions, or decision, subject to such limitations imposed by law, and R.A. 6713, otherwise known as the Code of Conduct and Ethical Standards for Public Officials and Employees. In reply, please be informed that Sections 71 and 72 of the Tax Code of 1997, provides, viz: "SEC. 71. Disposition of Income Tax Returns, Publications of Lists of Taxpayers and Filers . After the assessment shall have been made, . . ., the returns, together with any corrections thereof which may have been made by the Commissioner, shall be filed in the Office of the Commissioner and shall constitute public records and be open to inspection as such upon the order of the President of the Philippines, under rules and regulations to be prescribed by the Secretary of Finance, upon recommendation of the Commissioner. "The Commissioner may, in each year, cause to be prepared and published in any newspaper the lists containing the names and addresses of persons who have filed income tax returns. "SEC. 72. Suit to Recover Tax Based on False or Fraudulent Returns . When an assessment is made in case of any list, the statement or return, which in the opinion of the Commissioner was false or fraudulent or contained any understatement or undervaluation, no tax collected under such assessment shall be recovered by any suit, unless, it is provided that the said list, statement or return was not false nor fraudulent and did not contain any understatement or undervaluation; but this provision shall not apply to statements or returns made or to be made in good faith regarding annual depreciation of oil gas wells and mines." and Section 270 of the Tax Code of 1997, provides, to wit: "SEC. 270. Unlawful Divulgence of Trade Secrets . Except as provided in Section 71 of this Code and Section 26 of Republic Act No. 6388, any officer or employee of the Bureau of Internal Revenue who divulges to any person or makes known in any other manner than may be provided by law information regarding the business, income, or estate of any taxpayer, the secrets, operation, style or work, or apparatus of any manufacturer or producer, or confidential information regarding the business of any taxpayer, knowledge of which was acquired by him in the discharge of his official duties , . . ." (Emphasis supplied) The confidentiality rule enunciated in Section 270 as above-stated, however, is subject to certain exceptions, as in the following instances: 1) When the inspection of the returns is authorized upon written order of the President of the Philippines; 2) When inspection is authorized under Finance Regulations No. 35 of the Secretary of Finance; 3) When the production of the tax return is a material evidence in a criminal case wherein the Government is interested in the result (Cu Unjieng vs. Posadas, 28 Phil. 260); and cdll 4) When the production or inspection thereof is authorized by the taxpayer himself (Vera vs. Cusi, L-33115, promulgated June 29, 1979). Moreover, what the 1987 Philippine Constitution allowed to be accessed are information on matters of public concern such as official records, documents, and papers pertaining to official acts, transactions, or decisions, as well as to government research data used as basis for policy development . Further, the connotation of public interest as propounded by the two cases decided by the Supreme Court which you have cited is no other than the propriety of paying taxes in due time as assessed by the proper authorities, since taxes are important in running the affairs of the government because taxes are its lifeblood; hence their prompt and certain availability is an imperious need (Collector vs. Goodrich International Rubber Co., L-22265, March 27, 1968). Accordingly, absence of any exceptions to the confidentiality rule under Section 270 of the Tax Code of 1997 and since the tax case of General Milling is already submitted to the proper forum in accordance with the provisions of the Rules of Court, your request is hereby denied for lack of legal basis. It shall be sub judice should anyone interferes with the process of the concerned forum acquiring jurisdiction over a tax case. Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue