Rappler Holdings, Maria Ressa lose round one as CTA proceeds with tax evasion trial

Rappler Holdings Corporation (RHC) and its president, journalist Maria Ressa, have lost the first round as the Court of Tax Appeals (CTA) opted to proceed with their P65.86-million tax evasion cases.

In a recent 13-page resolution, the CTA 1st Division denied RHC and Ressa’s motion to quash the informations, as it did not find the allegations defective.

The court said the charges sufficiently indicated the dates and location of the alleged crimes, the amounts of income tax and value-added tax deficiencies, and the description of the acts and omissions that constituted violations of the National Internal Revenue Code (NIRC).

It said the wordings of the charge sheet “accomplished the… purpose” of enabling RHC and Ressa to know the offenses they were accused of.

“We find the language and the wordings therein sufficient to constitute the crimes charged under Sections 254 and 255 of the NIRC,” read the resolution penned by Presiding Justice Roman del Rosario.

RHC had disputed the Bureau of Internal Revenue (BIR) and the Department of Justice’s (DOJ) claim that it was a “dealer in securities” required to report its earnings from the issuance of Philippine Depositary Receipts (PDRs) to its foreign investors.

However, the court said this was “matter which can be ventilated by the presentation of evidence during trial.”

The charges before the CTA concerned three counts of violation of Section 255 of the National Internal Revenue Code (NIRC) for failure to supply correct information in the income tax return (ITR) for 2015 and the value-added tax returns (VATR) for the third and fourth quarters of that year.

One more count of violation of Section 254 of the NIRC was filed against RHC and Ressa for “deliberately and calculatedly not declaring” an alleged P162.41-million profit in its tax returns.

The BIR and the DOJ claimed that by concealing the profit, RHC and Ressa cheated the government of P48.72 million in income taxes and P17.14 million in value-added taxes.

The supposed gain allegedly arose from RHC’s purchase of Rappler, Inc. shares at P1.00 each for a total subscription price of P19.25 million.

It then issued PDRs—financial instruments that allow foreigners to invest in a media entity without gaining any share or management participation to avoid violating the Constitution’s full-Filipino ownership requirement—to North Base Media Rappler, L.P., and Omidyar Network Fund LLC.

The value of the said PDRs were higher at P111.47 million and P70.18 million, respectively.

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