SC Declares BIR and SEC Regulations as Unconstitutional

The Supreme Court (SC) has officially declared void for being unconstitutional, the regulations issued by the Securities and Exchange Commission (SEC) and the Bureau of Internal Revenue (BIR) which compelled businesses part of the financial and banking sectors to disclose investor names, including tax identification number (TIN), amount of income, and withholding tax.

In a 46-page decision written by Associate Justice Ramon Paul L. Hernando, the SC decided that the BIR Revenue Regulations 1-2014, Revenue Memorandum Circular (RMC) 5-2014, and SEC Memorandum Circular (MC) 10 (Series of 2014), breach the right to privacy and due process of the petitioners.

“There is no assurance that the information gathered and submitted to the listed companies under the questioned regulations will be protected and not be used for any other purposes outside the stated purpose,” said the SC.

“The investors provided their information to the brokers, presumably without the intention of sharing such with any other entity, including the investee companies and the BIR,”

Back in September 2014, the Court issued a temporary restraining order (TRO) which enjoins the SEC and the BIR from implementing regulations.

The TRO was sought by the Trust Officers Association of the Philippines and Marmon Holdings Inc., the Fund Managers Association of the Philippines, the Philippine Association of Securities Brokers and Dealers Inc., the Philippine Stock Exchange Inc. (PSE), and the Bankers Association of the Philippines.

The petitioners asserted that the regulations violated their right to privacy over personal information protected by the Republic Act 10173 or the Data Privacy Act.

Source: Business Mirror