Good news for lawyers, bad news for the Bureau of Internal Revenue (BIR).
The Supreme Court (SC) on Tuesday granted a petition of the Integrated Bar of the Philippines (IBP) to stop the implementation of a regulation issued by the BIR and the Department of Finance (DOF) requiring lawyers to submit affidavits of fixed service rates.
In their Baguio City summer session, the SC en banc issued a temporary restraining order (TRO) against Finance Secretary Cesar Purisima and BIR Commissioner Kim Jacinto-Henares.
The TRO covered only lawyers who were the main petitioners in the case. Excluded were doctors and other professionals who were not covered by the petition.
The IBP, through its counsel, Dean Pacifico Agabin, particularly asked the High Court to declare as null and void the revenue regulation for being unconstitutional.
Under Section 2 of the regulation, all self-employed professionals are required to submit an affidavit indicating the rates, manner of billings and the factors they consider in determining their service fees upon registration every year thereafter on or before January 31; register the books of accounts and official appointment books of their practice of profession which shall contain the names of the client and date or time of the meeting; to issue a BIR-registered receipt showing a 100 percent discount in cases when no professional fees are charged.
But the IBP said the respondents acted with grave abuse of discretion in issuing the revenue regulation as it “encroaches upon the court’s exclusive authority and jurisdiction to regulate and prescribe rules for the protection and enforcement of Constitution rights, legal practice and the legal profession.”
It maintained that the regulation had violated the doctrine of separation of powers.
The IBP also argued that the assailed policy does not conform with ethical standards set by the High Court for the legal profession.
Both the Code of Professional Responsibility and Rules of Court say the relationship between a lawyer and his client should be “strictly personal, fiduciary and highly confidential.”
The IBP said under Rule 130, Section 24 (b) of the Rules of Court, lawyers are prohibited from testifying on any communication received from a client.
It added that the submission of a notarized list of services with corresponding rates makes it appear that the law profession is a “mere trade or money-making endeavor,” instead of being devoted to public service.
The IBP said implementing the revenue regulation will lead to “illegal restriction on the practice of law, as it unduly limits a lawyer’s liberty to ascertain the fair and reasonable value of his services according to standards defined by the Supreme Court.”