DOJ files tax evasion charges against Rappler and its president
A holding affiliate of news website Rappler and its president Maria Ressa have been charged with tax evasion in the Court of Tax Appeals (CTA) and the Pasig City Regional Trial Court (RTC).
The criminal charges filed by Department of Justice (DOJ) prosecutors stemmed from Rappler Holdings Corp.’s (RHC) alleged failure to declare a P162.41-million profit from the issuance of Philippine Depositary Receipts (PDRs) in 2015.
PDRs are financial instruments typically used by some Philippine media entities to receive foreign investment without violating the Constitution’s requirement of full Filipino ownership.
RHC and Ressa were charged with three counts of violating Section 255 of the National Internal Revenue Code in the CTA for supposedly failing to submit correct information in the holding firm’s 2015 annual income tax return and the value-added tax (VAT) returns for the third and fourth quarters of that year.
Another CTA case pertained to one count of willful attempt to evade tax under Section 254 of the revenue code for “deliberately and calculatedly not declaring” the gain.
Pasig court case
One more count of violation of Section 255—concerning the VAT return for the second quarter of 2015—was filed in an RTC in Pasig City. It involved a much smaller foregone tax than the other cases.
Prosecutors recommended that bail be set at a total of P204,000 for the four CTA cases and another P60,000 for the Pasig RTC case.
The charges were filed even as RHC and Ressa’s appeal was still pending in the DOJ, which found probable cause to order their indictment in an Oct. 2 resolution.
The Bureau of Internal Revenue (BIR) claimed that the government lost P48.72 million in income taxes for 2015, and VAT of P17.14 million for the second, third and fourth quarters of that year.
According to the BIR, RHC purchased Rappler Inc. shares at P1 each for a total subscription price of P19,245,975. It then issued corresponding PDRs to foreign investors NBM Rappler L.P. and Omidyar Network Fund LLC at a marked-up value of P111,474,554.10 and P70,184,204.57, respectively.
The transactions were allegedly not disclosed in RHC’s financial statements.
Acting on the BIR complaint, the DOJ ruled that the PDR transactions were a form of securities trading, which should have been reported for tax purposes. It deemed NBM Rappler and Omidyar to be customers.
Ressa said the cases were “part of government’s desperate efforts to harass and silence independent media such as Rappler.”
“These cases will not intimidate nor distract us from holding public officials to account through our stories,” said the internationally recognized journalist.
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