BIR files P133-M tax evasion raps vs. Rappler

MANILA The Bureau of Internal Revenue (BIR) on Thursday filed a tax evasion complaint before the Department of Justice (DOJ) against Rappler Holdings Corp. (RHC) and its officers for failing to pay PHP133 million in taxes.

Named as respondents in the complaint were 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.

The BIR alleged that the company is liable for non-payment of PHP133,841,305 broken down into PHP91,320,481 in income tax and PHP42,520,824 in VAT for the year 2015.

Based on the complaint, RHC purchased common shares from Rappler, Inc. worth PHP19,245,975. Then, it issued and sold Philippine Depositary Receipts (PDRs) to two foreign firms worth PHP181,658,758.

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

The agency explained 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.

Last January, the Securities and Exchange Commission (SEC) revoked the certificate of incorporation of Rappler, Inc. and RHC allegedly for violating the Constitution and foreign equity restrictions in mass media.

The SEC stated that Rappler violated the Foreign Equity Restrictions in Mass Media enshrined in the 1987 Constitution and enforceable through the Mass Media Law, Anti-Dummy Law, and the Foreign Investment Act.

Article XVI, Section 11 (1) of the Constitution states, The ownership and management of mass media shall be limited to citizens of the Philippines, or to corporations, cooperatives or associations, wholly-owned and managed by such citizens.

Rappler filed a petition before the Court of Appeals (CA) seeking to stop the implementation of the decision made by SEC.

In their petition, they asked the appellate court to reverse and set aside the SEC en banc decision dated Jan. 11, claiming that the SEC issued the assailed order hastily that it violated their constitutional right to due process.

Rappler argued that the ruling was done in the absence of a formal charge, which was supposed to be required in the commission's rules.

"There was also no formal administrative action filed against Rappler and RHC before the SEC. Without an administrative action, surely, no administrative action, including the suspension or revocation of the corporation's franchise, could have been imposed by the SEC," read the petition.

In a resolution dated Feb. 7, the CA's 13th Division ordered the SEC to file its comment within 10 days from notice, giving the petitioners five days to reply.

"Without necessarily giving due course to the petition, the Court resolves to direct respondent to file comment thereon (not a motion to dismiss), within 10 days from notice. Petitioners are given five days from receipt of the required comment to file a reply thereto," the ruling stated.

The resolution was approved by its ponente, CA Justices Rafael Santos, along with CA Justices Socorro Inting and Apolinario Bruselas.

In addition, both parties were ordered to notify the Court of any other pending cases involving the same issues at hand.

"The parties are required to promptly notify this Court of any other cases or proceedings involving the same parties and issues in the Court or other courts within five days from knowledge thereof, pursuant to the directive of the Supreme Court in AM No. CA 13-51-J dated July 2, 2013," it said.

Santos will make his study and recommendation on the plea of Rappler to stop the SEC from revoking their license to operate.

Source: Philippine News Agency