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MANILA, Philippines – A Pasig court acquitted Nobel Peace Prize laureate and Rappler chief executive officer Maria Ressa, and Rappler Holdings Corporation (RHC) of tax evasion charges on Tuesday, September 12.
“WHEREFORE, in view of the foregoing, the accused Rappler Holdings Corporation and Maria A. Ressa are hereby ACQUITTED in Criminal Case No. R-PSG-18-02983-CR for violation of Section 255 of the 1997 National Internal Revenue Code, as amended, on the ground that they did not commit the offense charged in the Information. Meanwhile, the civil aspect of the case is DISMISSED,” Pasig City Regional Trial Court Branch 157, under Presiding Judge Ana Teresa Cornejo-Tomacruz, ruled in its 18-page decision.
In acquitting Ressa and Rappler, the Pasig court said the RHC did not act as a dealer in securities when it issued PDRs to North Base Media, and that the PDR transactions were just in line with the RHC’s purpose as a holding company.
“RHC did not sell the PDRS to NBM in the regular course of its business to gain profit, but issued the PDRS as part of a larger scheme to legally raise capital for its subsidiary. It is thus not liable to pay VAT on these transactions under Section 105 of the Tax Code,” the court explained.
The court’s grounds in the acquittal were almost identical to the CTA’s explanation in junking the case in January.
The decision was penned by Presiding Judge Ana Teresa Cornejo-Tomacruz. Since the Pasig court handed down an acquittal, the prosecution can no longer appeal the criminal aspect of the case because it would amount to a violation of the double jeopardy rule, which is constitutionally protected.
Section 21 of the Constitution states: “No person shall be twice put in jeopardy of punishment for the same offense. If an act is punished by a law and an ordinance, conviction or acquittal under either shall constitute a bar to another prosecution for the same act.”
The court victory ended four years and 10 months of trial of the case filed under the administration of former president Rodrigo Duterte in November 2018. The case was filed two months after the Philippines’ Securities and Exchange Commission (SEC) issued a closure order against Rappler based on the claim of the Duterte administration that the company is foreign-owned.
Rappler is, however, a 100% Filipino-owned company – a point asserted by the newsroom in its appeal against the SEC order pending before the Court of Appeals (CA).
“This is a victory not just for Rappler but for everyone who has kept the faith that a free and responsible press empowers communities and strengthens democracy,” Rappler said in a statement.
“We share this with our colleagues in the industry who have been besieged by relentless online attacks, unjust arrests and detentions, and red-tagging that have resulted in physical harm. We share this with Filipinos doing business for social good but who, like us, have suffered at the hands of oppressive governments,” the news outlet added.
This is the latest acquittal secured by Ressa and RHC, after the Court of Tax Appeals (CTA) also cleared them of four tax-related charges in January 2023.
In acquitting Ressa and RHC, the CTA said early this year that the Bureau of Internal Revenue had “no factual or legal basis” to file the civil and criminal complaints. The facts in the Pasig tax case were identical to the four charges junked by the CTA.
“The acquittal speaks extremely well of our judicial system. It sends a strong message that the rule of law prevails in the Philippines even against the most powerful forces of government,” Francis Lim, lead counsel of Rappler and former Philippine Stock Exchange president, said.
He added: “Let’s continue to believe in our judicial system. Even more important is doing our part in building an independent, impartial, effective and efficient judiciary because it is so important for our economic development and our competitiveness in the global stage.”
With the junking of the last tax case, there are only two remaining active cases against Rappler and its CEO: (1) Ressa and former Rappler researcher Reynaldo Santos Jr.’s appeal on their cyber libel conviction pending before the Supreme Court and (2) the appeal on the closure of Rappler pending at the CA.
(Aside from the two active cases, there was also an anti-dummy case filed against Ressa and Rappler directors pending before Pasig RTC Branch 159. However, the trial of the said charge has been suspended.)
The case decided by the Pasig court stemmed from the alleged violation of Section 255 of the National Internal Revenue Code over alleged willful and unlawful failure to supply correct information in Rappler’s second quarter value-added tax (VAT) return for taxable year 2015. The case was filed in connection with RHC’s issuance of Philippine Depositary Receipts (PDRs) to NBM Rappler and Omidyar Network Fund.
A PDR is a financial instrument that grants its holder the right to the delivery or sale of underlying shares, among others. It does not grant ownership rights to the holder. The prosecution argued that RHC was allegedly involved in the issuance and sale of securities, for which it should have paid VAT since the corporation allegedly received “sales receipts.”
However, Francis Lim, lead counsel of Rappler and former head of the Philippine Stock Exchange, said Rappler did not sell PDRs and that the transaction was only meant to raise capital. Lim added that there was no buying or selling of securities in the PDR transaction. – Rappler.com