House of Representatives

September 23, 2009 BIR RULING [DA-(S270-005) 566-09] Section 20 (A), 270 House of Representatives Quezon City, Metro Manila Attention: Hon. Ulpiano P. Sarmiento Representative, A TEACHER Party-List Gentlemen : This refers to your letter dated August 13, 2009 requesting for copies of the latest tax information of the top 50 schools, colleges and universities in the country for purposes of the committee deliberation on House Bill No. 6676. 1 In reply, please be informed as follows: Section 270 of the National Internal Revenue Code (NIRC), as amended, prohibits the unlawful divulgence of trade secrets including the income of any taxpayer, as follows: "SEC. 270. Unlawful Divulgence of Trade Secrets. Except as provided in Section 71 of this Code and Section 26 of the 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, shall, upon conviction for each act or omission, be punishable by a fine of not less than Fifty thousand pesos (P50,000) but not more than One hundred thousand pesos (P100,000), or suffer imprisonment of not less than two (2) years but not more than five (5) years, or both." (Emphasis Supplied) AEcTCD In relation thereto, Section 71 of the NIRC provides that: "SEC. 71. Disposition of Income Tax Returns, Publication of Lists of Taxpayers and Filers. After the assessment shall have been made, as provided in this Title, 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." It appears that, under Section 71, returns may be subject to public inspection after the same has been assessed, filed and constituted as public records with the Office of the Commissioner and only upon the order of the President of the Philippines. However, Section 20 (A) of the NIRC also provides another exception to Section 270. Said Section allows the Commissioner to furnish pertinent information including taxpayer's returns or information thereon upon the request of the appropriate Committee in Congress in its inquiries in aid of legislation, as follows: IHCDAS "SEC. 20. Submission of Report and Pertinent Information by the Commissioner. (A) Submission of Pertinent Information to Congress. The provision of Section 270 of this Code to the contrary notwithstanding, the Commissioner shall, upon request of Congress and in aid of legislation, furnish its appropriate Committee pertinent information including but not limited to: industry audits, collection performance data, status reports in criminal actions initiated against persons and taxpayer's returns: Provided, however, That any return or return information which can be associated with, or otherwise identify, directly or indirectly, a particular taxpayer shall be furnished the appropriate Committee of Congress only when sitting in Executive Session unless such taxpayer otherwise consents in writing to such disclosure." Considering, however, that the income tax information being requested would directly identify the particular school, college or university, such information may only be furnished to the appropriate Committee of Congress sitting in Executive Session unless the particular taxpayer concerned consents to the disclosure in writing. Based on the foregoing, this Office is constrained to withhold such information in the meantime pursuant to Section 20 (A) in relation to Section 270 of the same Tax Code. IEHaSc Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service Footnotes 1. An Act Recognizing and Strengthening The Tax Exemptions Granted To Educational Institutions Pursuant to Article XIV, Section 4 (3) of the 1987 Constitution by Amending Several Provisions of Presidential Decree No. 1158 as amended by Republic Act No. 8424 otherwise known as the National Internal Revenue Code of the Philippines.