TIMELINE: Tracing BIR’s tax evasion complaint vs Maria Ressa, Rappler Holdings

(Editor’s note: This story was first published on April 17, 2018. We have updated it to reflect latest developments, specifically the recent acquittal of Nobel laureate Maria Ressa and Rappler Holdings Corporation.)

MANILA, Philippines – A Pasig court on Tuesday, September 12, acquitted Nobel Peace Prize laureate and Rappler chief executive officer Maria Ressa, and Rappler Holdings Corporation (RHC) of its last remaining tax evasion case filed by the Duterte administration.

The decision was handed down by Pasig City Regional Trial Court Branch 157 Presiding Judge Ana Teresa T. Cornejo-Tomacruz.

This latest victory concludes four years and 10 months of trial. This also means that Ressa and RHC are no longer facing any tax evasion charges.

The decision came eight months after the Court of Tax Appeals in January 2023 acquitted Ressa and RHC of four charges of tax evasion for “failure of the prosecution to prove their guilt beyond reasonable doubt.” The CTA justices said “no gain or income was realized” by Ressa and RHC through the PDR transactions.

The January decision involved a tax evasion case filed by the Bureau of Internal Revenue (BIR) against RHC – part of a series of complaints from government agencies that have been going after the social news network since then-president Rodrigo Duterte accused it of being foreign-owned and funded by the United States’ Central Intelligence Agency.

The BIR argued that RHC, as a dealer in securities – a claim disputed by Rappler – is subject to income tax and value-added tax.

As defined in the tax code, a dealer in securities is “a merchant of stocks or securities, whether an individual, partnership or corporation, with an established place of business, regularly engaged in the purchase of securities and the resale thereof to customers; that is, one who, as a merchant, buys securities and re-sells them to customers with a view to the gains and profits that may be derived therefrom.” RHC has said it issued Philippine Depositary Receipts (PDRs) amounting to P188 million only and did so to raise capital and grow its business. It did not make a profit from the issuances.

Here’s a rundown of events surrounding the tax evasion complaints and its conclusion after more than four years:

May 25, 2015

Rappler Holdings issues 12,028,718 PDRs to investment firm North Base Media Limited. (READ: TIMELINE: The case of Rappler’s SEC registration)

A PDR is a financial instrument that allows foreigners to invest in a Filipino company, without owning any part of it. This is consistent with the Constitution, which states that mass media in the Philippines should be wholly owned by Filipinos. A PDR is not equivalent to a share in the company. It does not amount to ownership.

Rappler is the first media startup in the Philippines to join broadcasting network giants ABS-CBN and GMA in offering PDRs to international investors. 

May 31, 2015

Rappler Holdings publishes a report announcing its partnership with North Base.

June 8, 2015

Rappler Holdings files Securities and Exchange Commission (SEC) Form 10-1 – for confirmation of exempt transactions – for the 264,601 PDRs sold to North Base.

August 8, 2015

Rappler Holdings files a subsequent SEC Form 10-1 for the 11,764,117 PDRs sold to North Base.

October 2, 2015

Rappler Holdings issues 7,217,257 PDRs to Omidyar Network Fund LLC.

November 5, 2015

Rappler Holdings publishes a report announcing Omidyar Network’s investment.

December 1, 2015

Rappler Holdings files SEC Form 10-1 for the 7,217,257 PDRs issued to Omidyar Network.

January 11, 2018

The SEC revokes Rappler’s license to operate because the PDRs of Omidyar Network supposedly violate the constitutional restrictions on ownership.

February 28, 2018

Omidyar Network announces it has donated its PDRs to 14 Filipino managers of Rappler, in an effort “to address the unwarranted ruling” made by the SEC. 

March 5, 2018

Five days after the PDR donation, the BIR delivers to the Rappler office a notice dated March 2, requesting for various documents related to a tax examination of Rappler Holdings.

March 8, 2018

In just three days, the BIR publishes a press release on its website announcing a tax evasion complaint against Rappler Holdings, alleging that the firm, together with its president Maria Ressa and treasurer James Bitanga, willfully attempted to evade tax payments, as well as failed to provide accurate information in its income tax and value-added tax returns for 2015.

BIR Commissioner Caesar Dulay writes a referral letter to 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.”

Rappler Holdings finds out via Twitter that the BIR filed a tax evasion complaint against the firm, even if the firm has not submitted to the BIR any documents for assessment and investigation as of this period.

March 13, 2018

Rappler Holdings questions the BIR’s grounds for filing a criminal complaint against its two executives for allegedly evading P133.8 million in taxes.

The firm’s lawyer Francis Lim says Rappler Holdings cannot be considered a dealer in securities when it issued the PDRs to Omidyar Network and North Base. “Rappler was the issuer; it did not buy the PDRs.” (READ: Rappler lawyer cites loopholes in BIR’s tax complaint)

Lim also says Rappler Holdings did not resell the shares it bought from Rappler Incorporated. He points out that the PDRs of Rappler Holdings are different from the Rappler Incorporated shares. “Those two are distinct financial iinstruments.”

Lim, senior partner at Angara Abello Concepcion Regala and Cruz Law Offices, also argues that the capital raised from issued PDRs had not yet been booked by Rappler as income.

April 16, 2018

Rappler Holdings receives the tax evasion complaint from the BIR. Ressa and Bitanga also receive a subpoena from the Department of Justice (DOJ) over the complaint.

The subpoena is signed by Assistant State Prosecutor Zenamar J.L. Machacon-Caparros on April 11.

The assistant state prosecutor orders Ressa and Bitanga to submit their “counter-affidavit and other supporting documents” or affidavits by witnesses, if any, at 11 am. Two dates are listed: April 24 and May 7.

The seven government offices that have taken action against Rappler include the Office of the Solicitor General, SEC, DOJ, National Bureau of Investigation, Malacañang, Department of Education, and now, the BIR.

October 2, 2018

The DOJ indicts Rappler Holdings and Maria Ressa for tax evasion and failure to file tax returns, stating that through PDRs the company “gained close to P162.5 million from the transaction, which it failed to declare in its tax return.”

Assistant Prosecutor Caparros signs the indictment.

November 9, 2018

The DOJ makes public the resolution indicting Rappler Holdings and Ressa.

“The National Prosecution Service (NPS) has found probable cause to indict Rappler Holdings Corporation (RHC), its President Maria Ressa and its independent Certified Public Accountant Noel Baladiang for violation of the National Internal Revenue Code or the tax code,” the justice department says in a statement.

November 9, 2018

The Department of Justice separately files a tax case before the Pasig Regional Trial Court (RTC). The case stems from an alleged violation of Section 255 of the Tax Code in relation to Rappler’s supposed failure to supply correct information in its VAT return for the 2nd quarter of tax year 2015.

The DOJ accuses Rappler of earning taxable income worth P2.45 million for that period, therefore “resulting in deficiency value added tax in the amount of P294,258 ($5,608), exclusive of surcharge and interest, to the damage and prejudice of the government.”

The case is at the Pasig RTC because according to tax laws, cases that involve less than P1 million shall be handled by the trial courts.

November 26 and 28, 2018

The DOJ files three counts of failure to file tax returns and one count of tax evasion against Rappler Holdings and Ressa before the CTA.

The justice department proceeds with the filing of cases despite the respondents’ filing of a motion for reconsideration.

November 28, 2018

Judge Danilo Buemio signs an arrest warrant for Ressa who has been charged with violating Section 255 of the National Internal Revenue Code of 1997. The arrest warrant, however, is released to the public by Pasig City Regional Trial Court (RTC) Branch 265 on December 3.

December 3, 2018

Ressa posts bail of P60,000 at Pasig City RTC Branch 265 for alleged violation of the tax code. In posting bail, Ressa does not waive her right to question the jurisdiction of the Pasig City court over this case.

December 4, 2018

Rappler Holdings and Maria Ressa file a motion to quash before the Pasig City court, asking it to void the charges, if not remand the investigation to the DOJ – or at least suspend proceedings while they avail of appeal remedies.

December 11, 2018

Ressa posts bail at the CTA over four charges of alleged violation of the tax code. She posts P204,000 (about $4,000) in bail ahead of the issuance of warrants of arrest.

December 12, 2018

Citing lack of jurisdiction and absence of due process, Rappler and Ressa ask the CTA to nullify the tax evasion case filed against them and remand it to the DOJ.

February 7, 2019

The CTA denies Rappler and Ressa’s appeal and decides to proceed with the trial over four counts of alleged tax violations.

The CTA says the motion to quash is moot as the DOJ already denied the appeal in November 2018.

March 16, 2020

Pasig court dismisses the motion to quash filed by Ressa and RHC.

July 22, 2020

Ressa pleads not guilty to the tax case during her arraignment at the Pasig RTC.

October 20, 2020

RHC, Ressa’s co-accused in the case before the Pasig court, is arraigned through its chairperson Glenda Gloria.

March 4, 2021

Ressa testifies before the CTA, the first time she takes the stand after a series of cases filed during the Duterte administration. She is the last witness to be presented by the defense.

October 11, 2022

The case is submitted for decision.

January 18, 2023

The CTA acquits Ressa and Rappler Holdings of four charges of tax evasion. The victory ends more than four years of trial of a case filed in March 2018 during the Duterte administration.

September 12, 2023

Pasig City RTC Branch 157 acquits Ressa and RHC of tax evasion.

This court decision also ends four years and 10 months of the trial that stems from a case filed by the Duterte administration in November 2018. This also means that Ressa and RHC are no longer facing any tax evasion charges. 

– with reports by Chrisee dela Paz and Rappler Research/Rappler.com

More information on Rappler’s cases:

TIMELINE: The case of Rappler’s SEC registration
TIMELINE: Rappler’s cyber libel case
FAQs: What you need to know about Rappler’s cyber libel case

As we celebrate the triumph of facts over politics, we want to thank you, our readers, for holding the line with us through the years. If you want to stay updated with Rappler’s other cases and be part of a community that supports press freedom, we invite you to join Rappler+, our membership program, here.