DOJ finds probable cause to charge Rappler, Maria Ressa for tax evasion

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Metro Manila (CNN Philippines, November 9) — The Department of Justice (DOJ) has found probable cause to charge Rappler Holdings Corporation (RHC), the parent firm of online news website Rappler, and its president Maria Ressa with tax evasion.

DOJ undersecretary Markk Perete said Friday in a statement that the National Prosecution Service, in an October 2 resolution, sided with the Bureau of Internal Revenue in its criminal complaint against RHC and Ressa for "willful attempt to evade or defeat tax and willful failure to supply correct and accurate information" under the Tax Code.

The resolution penned by Assistant State Prosecutor Zenmar J.L. Machacon-Caparros said that RHC "acted as a middleman" in the buying of shares of stock from Rappler, Inc. for the purpose of underwriting Philippine Depositary Receipts (PDRs) for resale.

The BIR said RHC earned close to ₱162.5 million from the transaction, which it supposedly failed to declare in its tax return.

Meanwhile, Caparros said Ressa should be held liable for RHC's alleged non-declaration of the transaction, as Section 253 of the Tax Code makes a corporate president, along with other officers, personally liable for infractions like those.

The original complaint filed by the BIR with the DOJ in March included RHC treasurer James Bitanga, but the DOJ dropped him upon Ressa's certification that he "was an inactive and nominal treasurer who did not participate in the management and operations of RHC."

The DOJ, however, still found liable RHC accountant Noel A. Baladiang of violating Section 257 of the Tax Code for certifying the financial statements of RHC despite its alleged failure to disclose the purchase of Rappler, Inc.'s shares.

PDRs in question

The same PDRs also led to the Securities and Exchange Commission's revocation of Rappler's license to operate in January.

The SEC said the PDRs gave American investment firm Omidyar Network control over Rappler, in violation of the constitutional ban on foreign ownership.

At the height of the issue, Omidyar donated the PDRs to 14 Filipino managers of Rappler, which caused the Court of Appeals to order the SEC to review the legal effects of this move, while upholding its earlier ruling.

Ressa, who is also Rappler's chief executive officer, previously called the BIR's complaint "ludicrous," telling it to "check its own records."

"This is clear intimidation and harassment. The government is wasting its energy and resources in an attempt to silence reporting that does not please the administration," Ressa said in a Rappler report.

Rappler is among the media companies which has drawn the ire of President Rodrigo Duterte, along with The Philippine Daily Inquirer and ABS-CBN. Government officials have denied that the criticisms hurled by Duterte against Rappler have any relation with the cases it is facing.

READ: Sociologist: Duterte's media criticism has grave implications on news practice

CNN Philippines Correspondent Anjo Alimario contributed to this report.