Rappler Holdings, Ressa ask tax court to void case

MANILA, Philippines – Citing lack of jurisdiction and absence of due process, Rappler Holdings Corporation (RHC) and its president Maria Ressa on Wednesday, December 12, asked the Court of Tax Appeals (CTA) to nullify the tax evasion case filed against them and remand it to the Department of Justice (DOJ).

In its motion to quash, RHC and Ressa also asked the court to suspend all proceedings related to the case, including the arraignment of Ressa.

Ressa however was allowed provisional arraignment before the court on Tuesday, December 11, as a prerequisite for her future travel. But the court noted that this will be “without prejudice” to the motion that she and RHC filed.

In their motion, Ressa and RHC accused the DOJ of depriving them their right to a “full preliminary investigation,” noting that the department filed the case in court prior to the lapse of the 15-day period for them to file their motions for reconsideration.

Prior to this, the Bureau of Internal Revenue (BIR) went ahead with filing a criminal complaint with the DOJ before it could even conclude its own administrative investigation into its own accusations against RHC and Ressa, the motion added.

Thus, the DOJ information filed in court carries mere “conclusions” and not evidence that could bolster government’s charges of tax evasion against the company, RHC and Ressa said.

“An information should indicate the ultimate facts showing how the crime charged was committed and not merely provide conclusions of law,” Ressa and RHC argued.

The case at the CTA is being handled by the 1st Division headed by Justice Roman del Rosario.

It is among a set of cases filed against Rappler since President Rodrigo Duterte criticized the media organization and made false accusations against it in his 2017 State of the Nation Address.

The cases include a closure order by the Securities and Exchange Commission in January 2018, which the Court of Appeals did not uphold and had remanded to the SEC; cyber libel; and anti-dummy law violation.

Ressa said these are part of the Duterte administration’s desperate efforts to harass and silence independent media such as Rappler.

Without consideration

On the basis of a BIR complaint, the DOJ filed on November 26 and 28 three counts of failure to file returns, and one count of tax evasion against Rappler and Ressa.

The department moved ahead with the filing of the cases despite the respondents’ motion for reconsideration filed with the DOJ.

There is no reason for the hasty filing of the criminal informations in court except to harass Rappler, the lawyers for RHC and Ressa said.

The case stems from Rappler’s Philippine Depositary Receipts (PDRs), a mechanism with which Filipino companies can have foreign investments.

The BIR and DOJ said that by issuing PDRs, Rappler earned taxable income.

According to the DOJ’s resolution signed by Assistant State Prosecutor Zenamar Machacon-Caparros, Rappler allegedly earned a taxable profit worth P181.658 million ($3.5 million) from the PDRs issued to Omidyar and North Base Media.

Rappler’s counsel said this has no legal leg to stand on because “it presumes – wrongly – that Rappler is a dealer in securities that profited from a sale.”

Lim has warned that the case will have a “chilling effect” on those who have raised and will raise capital through the issuance of PDRs and is a “blow to the development of our already laggard capital markets.”

Lim had earlier pointed out that network giants GMA and ABS-CBN have similar PDRs with similar agreements as Rappler’s, which the government has not at all investigated. – Rappler.com