DOJ orders filing of charges vs. Rappler head, accountant

“By not declaring such profits in its returns, the RHC has violated the Tax Code,” the justice department noted in its resolution dated October 2. (File Photo By Ramon FVelasquez – Own work, CC BY-SA 3.0)

MANILA — The Department of Justice on Friday ordered the filing of criminal charges against online news site Rappler president Maria Ressa and its accountant Noel Baladiang in connection with the PHP133-million tax evasion complaint filed by Bureau of Internal Revenue (BIR).

In a statement, the DOJ said Assistant State Prosecutor Zenamar Machacon-Caparros found probable cause to indict Rappler Holdings Corporation (RHC) and Ressa “for willful attempt to evade or defeat tax and willful failure to supply correct and accurate information under Sections 254 and 255 of the Tax Code.”

The DOJ said in buying shares for the purpose of underwriting Philippine Depositary Receipts for resale to interested buyers, RHC acted as a middleman whose profits were taxable under the Tax Code.

“By not declaring such profits in its returns, the RHC has violated the Tax Code,” the justice department noted in its resolution dated October 2.

Caparros added that Ressa “should be held to account for such violation because Section 253 of the Tax Code makes a corporate president, among other officers, personally liable for such infraction by the corporation.”

The complaint filed on March 8 by the BIR accused RHC and its executives — Ressa, who is also editor-in-chief, and treasurer James Bitanga — of violating the National Internal Revenue Code (NIRC) for deliberate failure to supply correct and accurate information in its annual income tax return (ITR) and value added tax returns (VAT) in 2015.

The DOJ dismissed the complaint against Bitanga, citing Ressa’s explanation that Bitanga was an active and nominal treasurer who did not participate in the management and operations of RHC.

The BIR also filed a complaint against Baladiang for violating Section 257(A)(2) of the Tax Code for signing and certifying the financial statements of RHC despite the clear omission and misstatement of his client’s actual taxable income.

Revenue officials claimed RHC has, on various dates, purchased shares from Rappler Inc.

, amounting to PHP19.245 million and, subsequently, sold Philippine Depositary Receipts (PDRs) on various dates to two entities — NBM Rappler LP and Omidyar Network Find LLC for PHP181.

658 million.

The BIR noted that RHC also used the same common shares it purchased from Rappler Inc. as underlying asset/share of the PDRs. Because of these transactions, the BIR pointed out RHC is clearly a dealer in securities and is subject to income tax (IT) and value-added tax (VAT).

The BIR said the annual ITR and VAT returns filed by RHC for taxable year 2015 showed that no IT and VAT have been paid for the transactions.

It said this means RHC has an aggregate tax liability amounting to PHP133.841 million which includes PHP91.320 million in IT and PHP42.520 million in VAT.