Department of Justice to charge Rappler firm, top exec

November 09, 2018

THE Department of Justice has found probable cause to indict Rappler Holdings Corporation (RHC), its president Maria Ressa, and its accountant Noel Baladiang for violation of the National internal Revenue Code or the Tax Code.

In a resolution, the DoJ upheld the complaint filed by the Bureau of Internal Revenue (BIR) against 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.

In its complaint, the BIR alleged that RHC, Ressa, and one other respondent, RHC treasurer James Bitanga, did not reflect in RHC’s 2015 tax returns the total gain of almost P162.5 million, which it realized from its issuance of Philippine Depositary Receipts (PDR) to NBM Rappler L.P. (NBM Rappler) and Omidyar Network Find LLC (Omidyar).

The BIR alleged that on various dates between 2014 to 2015, RHC purchased a total of 119,434,438 common shares from Rappler, Inc. at P1 per share. RHC thereafter issued PDRs against most of the shares that it held to NBM Rappler and Omidyar.

The subscription price for the PDRs was P181,6 million. RHC allegedIy gained close to P162,5 million from the transaction, which it failed to declare in its tax return.

On the other hand, the BIR accused accountant Baladiang of having violated Section 257 of the Tax Code for having certified the financial statements of RHC despite the corporation’s failure to discIose its purchase of RI shares,

In its resolution, the DoJ ruled that in buying shares for the purpose of underwriting PDRs for resale to interested buyers, RHC acted as a middleman whose profits were taxable under the Tax Code.