DOJ summons Rappler execs in P133-million tax raps

MANILA, Philippines — The Department of Justice (DOJ) has summoned top executives of online news outfit Rappler to answer the P133-million tax evasion charge filed by the Bureau of Internal Revenue (BIR) last month.

In a subpoena signed by Assistant State Prosecutor Zenamar Machacon-Caparros, the agency ordered Rappler president Maria Ressa and treasurer James Bitanga to appear before the panel of prosecutors and submit their counter-affidavits.

The panel has set the hearings on April 24 and May 7 at the DOJ office in Manila.

“You are hereby warned that failure on your part to comply with this subpoena shall be considered as a waiver to present your defense and the case shall be considered submitted for resolution based on the evidence on record,” read the subpoenas, which were issued last April 11 and received by the parties earlier this week.

The BIR filed the complaint against Rappler Holdings Corp. (RHC) and its officers last March 8 after its investigation showed a possible tax liability of the controversial online news company.

It specifically accused Rappler of violation of the National Internal Revenue Code by willful attempt to evade or defeat tax and for deliberate failure to supply correct and accurate information in its annual income tax (IT) return and value added tax (VAT) returns 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 its probe showed that RHC purchased common shares from Rappler Inc. worth P19,245,975 before it issued and sold Philippine Depositary Receipts (PDRs) to two foreign firms worth P181,658,758.67.

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.

It further alleged that RHC is subject to income tax and VAT, being a dealer in securities. However, the annual ITR and VAT returns for 2015, according to the BIR, does not reflect any IT and VAT from the PDR transaction. 

The foreign owners of Rappler have reportedly donated their shares to local stockholders to comply with the constitutional requirement.

The news outfit earlier claimed that the cases are part of harassment by the Duterte administration due to its persistent negative reports about the administration. 

The BIR case was filed after the Security and Exchange Commission cancelled its incorporation for alleged violation of the constitutional ban on foreign ownership in media companies.