Rappler execs: Tax evasion raps violate due process

Ressa submitted a joint counter-affidavit and sworn to before Assistant State Prosecutor Zenamar Machacon-Caparros at the DOJ in response the tax evasion complaint filed by the BIR. (File photo by PCOO)

MANILA — Officials of Rappler Holdings Corp. on Monday told the Department of Justice (DOJ) that the tax evasion complaint filed by the Bureau of Internal Revenue (BIR) against them for allegedly failing to pay PHP133 million in taxes is a violation of their right to due process.

Facing tax evasion raps are RHC president Maria A. Ressa and treasurer James C. Bitanga for violation of Sections 254 and 255 of the National Internal Revenue Code (NIRC) for willful attempt to evade or defeat tax, and for deliberate failure to supply correct and accurate information in its annual income tax return (ITR) and value-added tax (VAT) returns for 2015.

Ressa submitted a joint counter-affidavit and sworn to before Assistant State Prosecutor Zenamar Machacon-Caparros at the DOJ in response the tax evasion complaint filed by the BIR.

“We did not commit the alleged crimes…We believe there is no legal or factual basis for the Complainant’s allegations. We have, at all times, performed our duties diligently with utmost good faith and respect for the law,” read the joint counter-affidavit.

She recounted the BIR filed the complaint just only three days after going through the books of RHC.

“This claim, this charge, is absolutely false. I’ve called it ludicrous. I’ve called it ridiculous. I’ve said that it shows ill intent of intimidation and harassment or just plain incompetence,” Ressa said.

The BIR, in its complaint against Rappler Holdings Corporation (RHC) and its officers said it violated the National Internal Revenue Code (NIRC) by willful attempt to evade or defeat tax and for deliberate failure to supply correct and accurate information in its annual income tax return (ITR) and value added tax returns (VAT) for 2015.

“As consequence of its acts and omissions, the aggregate tax liability of RHC amounted to P133,841,305.75 broken down as follows: IT-P91,320,481.08 and VAT-P42,520,824.67,” read the complaint.

BIR said investigation showed that RHC purchased common shares from Rappler Inc. worth PHP19, 245,975.00. Then, it issued and sold Philippine Depositary Receipts (PDRs) to two foreign firms worth PHP181, 658,758.67.

The bureau said RHC used the same common shares it purchased from Rappler Inc. as the underlying share of the PDRs for profit and transmitted economic rights to the PDR holders.

The BIR pointed out that RHC should be subject to income tax and VAT, being a dealer in securities but the VAT return failed to indicate any IT and VAT paid for the PDR transactions.

But Atty. Eric Recalde of Rappler said what happened in 2015 was a fundraising activity.

“The company simply did a fundraising way back in 2015 by issuing the PDRs and lo and behold, surprisingly, the government this time is questioning the very same transaction that has been made even way back prior to 2015,” Recalde told reporters.

He maintained that there was no tax evasion and no intent to avoid payment of taxes.

“Everything was disclosed, not just in the financial statements, the SEC, and definitely there’s no way the company could be considered to be a dealer in securities which is essentially the basis why the BIR treated the transaction to be a buy and sale of securities allegedly subject to taxes,” he added.

In an interview after the filing, Ressa appealed to the BIR to investigate before filing criminal complaints.

“They asked for our books three days before they filed the charges. This is another instance where you have a case of political harassment because we’re journalists trying to do our jobs,” she said.

“I appeal again to the BIR, their job is to investigate before filing charges,” she added.

Caparros set the submission of BIR’s reply to Rappler’s counter-affidavit on May 21.