Now to the portion of the RR that was found to be void, the SC said that although requiring professionals to submit affidavits of rates, manner of billing, and considerations regarding fees neither encroached the Court’s rule-making power nor violated ethical norms, and that Section 2 (2) of the RR is valid, insofar as it obligates the registration of books of accounts as it finds justification in the Tax Code; Section 2 (1) of the RR went beyond the Tax Code when it compelled self-employed professionals to submit an affidavit of schedule of fees.

The ponente, Senior Associate Justice Marvic Leonen, quoted the esteemed members of our SC when they stressed that Section 2 (1) is void for being issued in excess of BIR’s authority. They explained that the BIR may obtain information only on concluded transactions, which are the taxable services. Requiring professionals to submit affidavits containing their fee structures and considered factors in assessing fees is irrelevant to the BIR’s primary duty of assessment and collection of taxes due.

The SC added that the mandatory registration of appointment books under Section 2 (2) of the RR is an unconstitutional intrusion into the fundamental rights of professionals and their patients and clients. It violates privacy rights and the ethical norms in petitioners’ professions.

The SC stressed that no less than the Constitution guarantees the right to privacy and that the privacy of communication and correspondence is inviolable except only when there is a court order, or as the law prescribes when public safety or order requires otherwise. Jurisprudence has since pointed out that the right to privacy enjoyed in our jurisdiction does not only concern correspondence and communication.

The SC determined that in setting appointments with a lawyer, doctor, accountant, dentist, or any other professional, clients and patients have a reasonable expectation of privacy with the professionals. They added that, similarly, when patients consult with doctors who specialize in specific medical conditions, that they can reasonably expect privacy that their identities will not be in some government record. And that listing one’s name in a book of appointments of a particular specialist, to be submitted to the State, potentially divulges information that need not be publicized. An exhaustive list of these conditions is not necessary; anyone consulting a doctor may reasonably expect privacy, especially as to their health.

The SC, furthermore, stated that “the Data Privacy Act generally prohibits the processing of sensitive personal and privileged information. This includes “any and all forms of data which under the Rules of Court and other pertinent laws constitute privileged communication.” As privileged communication, correspondence between physicians and their patients is likewise protected by the Data Privacy Act.

Finally, the ponente echoed Associate Justice Amy C. Lazaro-Javier and pronounced that the right to privacy encompasses privileged information. But they do not proceed from the same source of responsibility.

Privileged information cultivated in the course of professional relationships requires trust and confidence that compels the professional to “shut up.” For the (Bureau of Internal Revenue) to compel any professional at that, to divulge any information acquired in confidence is to force the professional to violate such trust. And for the purpose of obtaining “ready evidence” whenever the professional is suspected of violation of tax laws.

The SC even conceded that if any of these professionals decide that certain aspects of their relationship with their clients ought to be publicized and made transparent, they themselves will, through their organization, draft and publish this in their code of ethics. Until then, the fundamental right to privacy of the professionals, their clients, and their patients has to be upheld.

Accordingly, the SC ruled that Section 2 (1) and 2 (2) of the RR, insofar as they require the submission of an affidavit indicating the rates, manner of billings and the factors that self-employed professionals consider in their service fees, and the mandatory registration of their appointment books, are void, being issued in excess of the authority of the Bureau of Internal Revenue and Secretary of Finance and that they were permanently enjoined from implementing the unconstitutional provisions.

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