BIR files P133-million tax raps vs Rappler

MANILA, Philippines — The Bureau of Internal Revenue (BIR) yesterday filed a P133.84-million tax evasion case against Rappler Holdings Corp. (RHC), owner of online news site Rappler Inc., for allegedly furnishing incorrect information in its income tax and value-added tax (VAT) returns in 2015.

In the criminal case filed before the Department of Justice (DOJ), the BIR accused RHC and its executives of willful attempt to evade or defeat tax and for deliberate failure to supply correct and accurate information on the company’s ITR and VAT returns for taxable year 2015, following its issuance of Philippine Depository Receipts (PDR).

Respondents listed in the complaint include RHC president Maria Ressa and treasurer James Bitanga.

RHC is a domestic corporation whose primary purpose, among others, is to buy and sell real and personal properties, including shares of capital stock, bonds, debentures, promissory notes or other securities and obligations.

As a dealer in securities, RHC should be subject to income tax and VAT, according to the BIR.

The agency, however, said the ITR and VAT returns filed by the company showed that it did not pay income tax and VAT for the income it gained from the PDR it issued.

On various dates, RHC purchased common shares from Rappler Inc. amounting to P19.25 million. Using these common shares as the underlying asset, RHC then subsequently issued and sold PDRs to two foreign juridical entities amounting to P181.66 million.

“The purchase of the shares and the subsequent issuance of PDRs for profit that transmitted economic rights (financial returns or cash distributions) derived from the equity of Rappler Inc. to the PDR is proof that RHC is engaged in the purchase of securities and resale thereof to customers,” the BIR said in a statement.

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

The BIR said its probe showed that RHC purchased common shares from Rappler Inc. worth P19,245,975. Then, it issued and sold to two foreign firms PDRs worth P181,658,758.67.

Certified public accountant Noel Baladiang of RG Manabat and Co. was also charged by the BIR for signing and certifying the financial statement of RHC despite the alleged omission and misstatement of its actual taxable income.

Earlier, the Securities and Exchange Commission (SEC) described Rappler as “the mass media entity that sold control to foreigners” and revoked the Certificate of Incorporation of Rappler for allegedly violating constitutional restrictions on ownership of media entities.

The SEC also declared void the PDRs issued by RHC to Omidyar Network Fund LLC, created by eBay founder Pierre Omidyar.

In the meantime, the SEC said Rappler can continue to operate as the order is not yet “final and executory,” giving the company time to exhaust all legal remedies.

‘Intimidation, harassment’

“This is clear intimidation and harassment,” Rappler chief executive officer Ressa said in a statement yesterday, as she slammed the filing of the case.

“The government is wasting its energy and resources in an attempt to silence reporting that does not please the administration,” she added.

Ressa also called the complaint “ludicrous” and urged the BIR to “check its own records.”

In a report posted on its own website, Rappler said it “has been paying its taxes accurately, promptly and diligently, with no less than the BIR commending Rappler Inc. as one of Revenue Region 7’s top 500 corporate taxpayers.”

‘Law should be enforced’

For Malacañang, Rappler should be accountable if it violated tax laws. 

“The law should be enforced,” presidential spokesman Harry Roque said in a press briefing. 

“If there are unpaid taxes, they should be accountable. If I were given such huge amount, $1.5 million, I would pay taxes,” he added.

Cyberlibel complaint

Meanwhile, the National Bureau of Investigation (NBI) yesterday confirmed that it filed a cyberlibel complaint against Rappler last Friday. 

NBI Director Dante Gierran did not elaborate but referred reporters to Justice Secretary Vitaliano Aguirre II for other queries.

Named in the complaint were Ressa, reporter Reynaldo Santos Jr. and directors Manuel Ayala, Nico Jose Nolledo, Glenda Gloria, Bitanga, Felicia Atienza, Dan Alber de Padua and Jose Maria Hofileña.

Last month, the NBI said the cyberlibel complaint filed by businessman Wilfredo Keng over an article published in 2012 had no basis.

NBI Cybercrime Division chief Manuel Eduarte said Keng’s 2017 complaint against the news organization had already passed the one-year prescription period, aside from the fact that it has no merit.

Eduarte explained that the continuous publication of an article cannot be considered as a continuing offense because the original posting is deemed as a single offense. He said Rappler’s story about Keng could not be considered as a continuous offence since there is nothing new with their subsequent articles.

In its May 2012 article, Rappler named Keng as the owner of the black Chevrolet Suburban vehicle allegedly used by the late former chief justice Renato Corona.

At the time, one of Keng’s companies had a pending case in a lower court, the news website reported.  – Alexis Romero, Rey Galupo