Lately, instead of our legislators involved in pork barrel scams, the BIR has been targeting doctors and lawyers and other professionals. The tax woman, BIR Commissioner Kim Henares, even plans to require doctors and lawyers in particular to post their rates in their clinics or offices.
She reportedly reasoned that “there are 1.8 million registered professionals and sole proprietors but only around 400,000 to 500,000 individuals file their tax returns.” (Inquirer.net, Sep. 5, 2013)
But this is jumping into conclusions since—
First, when one is a registered professional with the Professional Regulation Commission or a lawyer admitted to the Philippine Bar, it does not follow that he or she is in private practice or self-employed required to file an annual income tax return. He or she could be employed in a company or in government for which reason there is no need to file a return unless he or she also obtains additional income from other sources. He or she could even have retired or taken up other pursuits.
For example, Fr. Joaquin Bernas, S.J. is a lawyer, but mainly a priest who does not earn income. Kim Henares is also a lawyer but employed in government. Hence, she does not have to file an income tax return for there is substituted filing upon withholding of tax due from her salary.
Second, if a professional or a lawyer in private practice has only one client or source of income like as consultant to a company, he or she does not have to issue any receipt or even file a return. Any tax due is deducted and remitted by his or her client to the BIR.
Third, the practice of profession is not a business. Charging a fee does not make a profession a business; it is but just compensation for services rendered. Thus, professionals or lawyers are not even allowed to engage in advertising. Obviously, posting rates like a restaurant’s menu is a form of advertising that would be unethical.
Fourth, for lawyers, only the Supreme Court has regulatory powers over their practice of law. The fees a lawyer charges a client are governed by the Rules of Court. BIR requiring the posting of rates by lawyers would intrude into this exclusive prerogative reserved by our Constitution in the Supreme Court.
So, too, it appears that BIR relies on the Consumer Act, likening patients or clients to consumers. This analogy is a ridiculous misreading of the law. The Consumer Act only applies to consumer products and services, that is, “goods, services and credits, debts or obligations which are primarily for personal, family, household or agricultural purposes, which shall include but not limited to, food, drugs, cosmetics and devices.” (Art. 4, para. [q], RA No. 7394)
While BIR’s efforts at curbing tax evasion are laudable, you don’t encourage tax compliance by illegal or unreasonable regulations.
“Nothing breeds lawlessness more than the lawless enforcement of the law.” - jamc
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