Rappler’s Ressa demands due process in BIR tax evasion rap

Veteran journalist and Rappler CEO Maria Ressa said on Monday that the Bureau of Internal Revenue (BIR) violated their rights to due process when it filed a more than P100-million tax complaint against the online news website allegedly without conducting any investigation.

“They asked for our books three days before they filed the charges. This is another instance where you have a case of political harassment because we’re journalists trying to do our jobs. I appeal again to the BIR, their job is to investigate before filing charges,” Ressa told reporters after the preliminary investigation conducted at the Department of Justice (DOJ). Rappler has submitted a counter-affidavit to the BIR’s complaint.

In its complaint, the BIR accused Rappler Holdings Corporation (RHC) and its officers of violating the National Internal Revenue Code (NIRC) by its willful attempt to evade or defeat tax and for deliberate failure to supply correct and accurate information in its annual income tax return (ITR) and value-added tax returns (VAT) for 2015.

“As (a) consequence of its acts and omissions, the aggregate tax liability of RHC amounted to P133,841,305.75 broken down as follows: IT-P91,320,481.08 and VAT-P42,520,824.67,” the complaint stated.

According to the BIR, an investigation showed that RHC purchased common shares from Rappler Inc. worth P19, 245,975.00. Then, RHC issued and sold Philippine Depositary Receipts (PDRs) to two foreign firms worth P181, 658,758.67.

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

The BIR pointed out that RHC should be subject to income tax and VAT, being a dealer in securities but the VAT return failed to indicate any IT and VAT paid for the PDR transactions.

But Rappler’s counsel, Atty. Eric Recalde, said what happened in 2015 was a fundraising activity.

“The company simply did a fundraising way back in 2015 by issuing the PDRs and lo and behold, surprisingly, the government this time is questioning the very same transaction that has been made even way back prior to 2015,” Recalde told reporters.

He maintained that there was no tax evasion and no intent to avoid payment of taxes.

“Everything was disclosed, not just in the financial statements, the SEC, and definitely there’s no way the company could be considered to be a dealer in securities which is essentially the basis why the BIR treated the transaction to be a buy and sale of securities allegedly subject to taxes,” Recalde said.

“I’ve called it ludicrous, I’ve called it ridiculous, I’ve said that it shows ill-intent of intimidation and harassment or just plain incompetence,” Ressa said. “So again, I think there are good men and women in the BIR, I certainly believe that’s the case in the Department of Justice. I appeal to their sense of upholding the Constitution and letting journalists do their jobs.”

The BIR has up to May 21 to submit a reply to Rappler’s counter-affidavit.  /kga