MANILA, Philippines (UPDATED) – The Department of Justice (DOJ) summoned Rappler president Maria Ressa and treasurer James Bitanga over the tax evasion complaint filed by the Bureau of Internal Revenue (BIR) against Rappler Holdings Corporation (RHC).
Ressa and Bitanga received the subpoena on Monday, April 16. The subpoena was signed by Assistant State Prosecutor Zenamar J.L. Machacon-Caparros on Wednesday, April 11.
Caparros directed Ressa and Bitanga to submit their “counter-affidavit and other supporting documents” or affidavits by witnesses, if any, at 11 am. Two dates were listed: April 24 and May 7.
“You are hereby warned that failure on your part to comply with this subpoena shall be considered as a waiver to present your defense and the case shall be considered submitted for resolution based on the evidence on record,” Caparros said.
The BIR last March 8 claimed that Rappler had profited from the sale of Philippine Depositary Receipts (PDRs) to two foreign entities in 2015 and that it should pay income and value added tax (VAT) for the transaction.
Francis Lim, a securities law expert and legal counsel of Rappler argued, however, that the capital raised from issued PDRs has not been booked by Rappler as income. “There is no income taxable event, so to speak. When you raise capital, that’s not income,” Lim said an interview with ANC.
The BIR had also said Rappler is subject to income tax and VAT as the company is a “dealer in securities” – a claim also contested by Lim. He said then that just because Rappler issued PDRs does not make it a dealer in securities. This interpretation, Lim added, would make any company or person who buys and sells shares a dealer in securities.
In a referral letter dated March 8, BIR Commissioner Caesar Dulay told then justice secretary Vitaliano Aguirre II that “RHC, Ms Ressa, and Mr Bitanga are being charged for willful attempt to evade or defeat tax and deliberate failure to supply correct and accurate information for taxable year 2015.” (READ: TIMELINE: Tracing BIR’s tax complaint against Rappler Holdings)
Dulay said RHC, Ressa, and Bitanga violated Sections 254 and 255 in relation to Sections 253 and 256 of the National Internal Revenue Code of 1997, as amended.
The DOJ’s Caparros said Ressa and Bitanga should submit the necessary documents at the second floor of the Prosecution Building of the Department of Justice in Padre Faura, Manila.
Clear intimidation and harassment
Ressa earlier called the BIR complaint “ludicrous.”
“This is clear intimidation and harassment. The government is wasting its energy and resources in an attempt to silence reporting that does not please the administration,” Ressa said.
Watch Rappler’s video explainer below:
The government offices that have taken action against Rappler include the Office of the Solicitor General, the Securities and Exchange Commission (SEC), the Department of Justice (DOJ), the National Bureau of Investigation (NBI), Malacanang Palace, the Department of Education, and now the BIR.
On Monday, the Presidential Communications Operations Office also protested against Facebook choosing Rappler as one of its two fact-checkers in the Philippines.
In a statement, Rappler said, “This is not about Rappler. This is about an action a long time coming – for the tech giant to put in place mechanisms that would help weed out the unfiltered lies that we’ve been getting on our social feeds for sometime now. This is not just about news groups. This is about making the first needed step in a problematic online environment that we are all trying to navigate and make better.” – Rappler.com