Philippine Center for Investigative Journalism (PCIJ)

October 8, 2009 BIR RULING [DA-(S270-006) 592-09] Sec. 270; DA-072-07 Philippine Center for Investigative Journalism (PCIJ) 3/F Criselda II Building, 107 Scout de Guia Street, Quezon City Attention: Ms. Malou Mangahas Executive Director Gentlemen : This refers to your letter dated August 7, 2009 requesting copies of the income tax returns filed by Her Excellency, President Gloria Macapagal Arroyo, from 2000 to 2009. It is represented that the request is made in connection with PCIJ's research on the Statement of Assets, Liabilities and Networth (SALN) of senior government officials and that income tax returns are public documents that should be appended to the SALN of government officials. In reply, please be informed that the requested documents contain information regarding the business and/or income of taxpayers which are considered confidential under Section 270 of the National Internal Revenue Code of 1997 (NIRC). The pertinent provision reads: "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, shall, upon conviction for each act or omission, be punished 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) 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. SDIaCT 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 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. In Opinion No. 72, Series of 1991, the Secretary of Justice opined that individual income tax returns under the first paragraph of the aforequoted Section "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". The existing rules on inspection of such returns provide that such inspection is allowed only to (a) BIR officials and employees whose official duties require such inspection; (b) the person who made the return, or his duly constituted attorney in fact; (c) the administrator, executor, or trustee of the taxpayer's estate or the duly constituted attorney-in-fact of such administrator, executor, or trustee, where the maker of the return has died; and (d) in the discretion of the Commissioner of Internal Revenue, one of the heirs of law or next of kin of such deceased person upon showing that he has a material interest which will be affected by the information contained in the return. (BIR Ruling No. DA-072-07 dated February 6, 2007) Based on the foregoing, the nature of PCIJ's request does not fall under any of the instances where Income Tax Returns of taxpayers may be revealed and, as such, this Office is constrained to withhold such information pursuant to Section 270 of the same Tax Code. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service