BIR’s Authority to Receive Information

The Bureau of Inside Income (BIR) just lately issued Income Memorandum Round (RMC) 6-2023 dated January 16, 2023. It has circulated sure opinions from the Nationwide Privateness Fee (NPC) confirming BIR’s authority to obtain private information/delicate info from people, nationwide/native authorities companies or officers, authorities companies and our bodies, and government-owned or government-controlled entities corporations for tax enforcement, evaluation and assortment functions.

Private information refers to information from which a person’s identification may be established or moderately and straight ascertained by the information topic, or when, along with different information, it straight and positively identifies a person. Delicate private information, in the meantime, contains details about race, ethnicity, marital standing, age, shade, non secular, philosophical or political affiliation, well being, schooling, social safety numbers, tax returns, and many others.

RMC 6-2023 additional depends on Part 4(e) of Republic Act 10173 or the Information Privateness Act (DPA) of 2012, which offers that the DPA doesn’t apply to “info crucial for the efficiency of public capabilities which is processing private information for the unbiased central financial authority and regulation enforcement and regulatory authorities to hold out their constitutional and statutory duties.”

The RMC additionally cites Part 5(B) of the Nationwide Inside Income Code of 1997, as amended, which states that the Commissioner of Inside Income has the facility to “usually be held liable by any particular person aside from the particular person whose inner gross sales tax is collected an audit or investigation, or by any bureau or official of the nationwide and native governments, governmental companies and companies, together with the Bangko Sentral ng Pilipinas and state-owned or managed enterprises, all info akin to, however not restricted to, price and quantity of manufacturing, Income or gross sales and gross earnings of taxpayers and the names, addresses and monetary statements of companies, mutual fund corporations, insurance coverage corporations, regional operations facilities of multinational companies, joint accounts, associations, joint ventures of consortia and included partnerships and their members.”

In NPC Advisory Opinion 2021-045 of December 29, 2021, the Fee acknowledged that BIR has the authority to analyze social media influencers to find out their tax liabilities and compliance with tax legal guidelines and rules.

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The NPC defined that the DPA offers for sure varieties of info which are thought-about particular instances and fall exterior the scope of the regulation. Part 5 of the DPA’s Implementing Guidelines and Rules (IRR) states that the Act and the IRR don’t apply to info required for the efficiency of the capabilities of a public authority in accordance with a constitutionally or legally required operate in reference to a regulation enforcement or regulatory capabilities are required. Nevertheless, this exception have to be strictly constructed, the NPC stated.

For the exemption to use, the next have to be thought-about: the data is required to hold out a regulation enforcement or regulatory operate of a public authority; the processing of the data is carried out to meet a constitutional or statutory mandate; there’s strict adherence to due course of necessities; it solely applies to the minimal assortment, entry, use, disclosure or different processing crucial for the related objective, operate or exercise; and solely the particular info falls exterior the scope of the DPA.

The general public authority deemed to be the controller of non-public information for the needs of the DPA should proceed to adjust to authorized necessities (e.g., implement cheap and cheap bodily, organizational, and technical safety measures; respect the rights of information topics; and adjust to the information safety ideas of transparency , official objective and proportionality).

As well as, the NPC famous that the Tax Code empowers the BIR to acquire info and subpoena, examine and testify in reference to its accountability for figuring out the accuracy of a declaration, making a declaration when none has been made, and figuring out to satisfy a person’s legal responsibility for inner gross sales taxes, the imposition of such legal responsibility, or the evaluation of tax compliance.

Equally, in Opinion 2021-028, the NPC acknowledged that the processing of non-public information by the BIR falls throughout the particular instances of the DPA in accordance with its mandate below the Tax Code.

The NPC suggested a condominium affiliation to supply the data and/or paperwork requested by the BIR akin to tenant lists, payments of sale, financial institution statements/depreciation schedule, official developer/vendor receipts for funds made, and payments of sale. This was as a result of such a request had a authorized foundation and was associated to the BIR’s Tax Verification Drive.

In Advisory Opinion 2020-015, the NPC stated the BIR could course of private and delicate info such because the listing of names and tax identification numbers of Filipinos employed by resident overseas missions akin to embassies and consulates within the Philippines. Once more, the NPC reasoned that BIR has the statutory authority to hunt info to evaluate a person’s tax compliance. That is significantly true in instances the place the BIR has recognized issues in complying with tax legal guidelines and rules.

In abstract, it have to be famous that whereas the BIR could have a authorized foundation for acquiring and processing private info and delicate private info, the acquiring and processing have to be achieved in a safe method and in strict compliance with and compliance with all guidelines and rules.


Nica Marsha V. Gasapo is a senior affiliate at Mata-Perez, Tamayo and Francisco. This text is offered for common info solely and isn’t an alternative choice to skilled recommendation when the info and circumstances warrant it. In case you have any questions or feedback about this text, you’ll be able to e mail the writer [email protected] or go to the MTF web site at www.mtfcounsel.com.