Rappler faces tax evasion, online libel raps

The Rappler newsroom at Capitol Commons in Pasig City —GRIG C. MONTEGRANDE

Tax evasion and libel cases are the latest moves the authorities have taken against Rappler, an online news site critical of the Duterte administration.

The Bureau of Internal Revenue (BIR) on Thursday filed a criminal complaint, accusing Rappler Holdings Corp. (RHC) and two executives of evading payment of P133.8 million in taxes. RHC is Rappler Inc.’s controlling stockholder.

The executives are RHC president Maria A. Ressa and RHC treasurer James C. Bitanga.

An accountant was also charged with violating the Tax Code “for signing and certifying the financial statements of RHC,” the BIR said in a statement.

The case comes eight weeks after the Securities and Exchange Commission rescinded Rappler’s operating license for violating foreign ownership rules.

Rappler, however, continues to operate pending an appeal and says it has done nothing wrong.

Last month, Malacañang barred Rappler from covering President Duterte.

Cyberlibel

Last week, the National Bureau of Investigation filed in the Department of Justice (DOJ) a complaint for cyberlibel against Rappler.

The Inquirer learned about it only on Thursday.

The NBI filed the complaint despite its earlier finding that there was no basis to sue the website over an article that said businessman Wilfredo Keng lent his SUV to Chief Justice Renato Corona during his impeachment trial in the Senate in 2012.

The complaint said Rappler should be held accountable because online libel was a continuing crime.

“Unlike published materials on print, defamatory statements online, such as those contained in libelous article written and published by subjects is indubitably considered a continuing crime until and unless the libelous article is actually removed or taken down,” the complaint read.

Named respondents were Ressa, Glenda Gloria, former reporter Reynaldo Santos Jr., Manuel Ayala, Nico Jose Nolledo, James Bitanga, Felicia Atienza, Dan Albert de Padua and Jose Maria Hofileña.

Ludicrous

Rappler scored the BIR for filing a tax evasion case against the company, calling it “ludicrous.”

In a statement, the website reminded the BIR that the agency itself had even recognized the media outlet as one of the top 500 corporate taxpayers at the BIR Region 7 in Quezon City. It said the BIR should check its own records.

“We are not surprised by this latest government move to harass us. But we are shocked by the speed of the BIR to file a complaint with the DOJ when it only sent its agents three days ago to deliver a letter to us that was remarkable for its lack of details,” Rappler said.

Normal procedure gave respondents 30 days to reply, it said.

Harassment

Ressa said the filing of the tax evasion case was clear intimidation and harassment. “The government is wasting its energy and resources in an attempt to silence reporting that do not please the administration.”

Rappler said it “has always been transparent and above board in all its dealings and transactions. And the records will bear us out.”

The BIR said Rappler had profited from the sale of Philippine depositary receipts (PDRs) to foreigners in 2015 and should pay income and value-added tax (VAT).

PDRs provide financial returns to foreign investors but not ownership and management.

Omidyar Network, the philanthropic arm of eBay founder Pierre Omidyar, which had bought PDRs, donated its

$1.5-million investment to Rappler’s managers. It said the donation would no longer  give the government legal grounds to stifle Rappler’s operations.

The alleged tax liability consisted of P91.3 million in income tax and P42.5 million in VAT.

The complaint said RHC purchased common shares from Rappler Inc. worth P19,245,975.00. Then, it issued and sold PDRs to two foreign companies worth P181,658,758.67.

The BIR said RHC used the same common shares it purchased from Rappler Inc. as the underlying share of the PDRs for profit and transmitted economic rights to the PDR holders.

Subject to taxes

The agency explained that RHC was subject to income

tax and VAT, being a dealer in securities.

However, the annual income tax and VAT returns for 2015, according to the BIR, did not reflect any income tax and VAT from the PDR transaction.

Asked to comment on the tax evasion case, presidential spokesperson Harry Roque said: “If there really is unpaid tax, they should be held accountable.”

The government has repeatedly denied it is going after Rappler or trying to stifle freedom of the press.

NBI’s transmittal letter

NBI Director Dante Gierran signed the transmittal letter of the libel complaint to the National Prosecution Service on March 2.

This contradicted the earlier claim of NBI Cybercrime Division (CCD), main investigators of the case, that online libel as a continuing crime could not be used to sue Rappler.

The findings of the CCD last month said there was no law or jurisprudence in the country stating that online libel was a continuing offense.

The CCD added that the time allowed for businessman Keng to file a complaint had already lapsed. —REPORTS FROM AIE BALAGTAS SEE, TETCH TORRES-TUPAS, NIKKO DIZON, JEROME ANING