Rappler asks Pasig court to quash tax case

Rappler Holdings Corporation (RHC) and its president, veteran journalist Maria Ressa, moved for a dismissal of the tax evasion charges filed by the government against them before a Pasig court.

Through counsel, RHC and Ressa urged the Pasig Regional Trial Court Branch 265 to junk the tax case for procedural and substantive issues they discussed in a 17-page motion to quash filed this week.

At the very least, they urged the court to remand the charges to the Department of Justice (DOJ) and suspend proceedings while prosecutors decide their reconsideration plea.

Ressa, the CEO and executive editor of the news website Rappler, is currently out on bail. She is scheduled to be arraigned on Friday.

The former CNN bureau chief of Manila and Jakarta is accused of violating the Tax Code by failing to declare “correct and accurate” information on quarterly sales receipts from the issuance and sale of Philippine Depositary Receipts (PDR) worth P2.45 million.

This allegedly resulted in a value-added tax deficiency of P294,258.58, excluding surcharge and interest, to the detriment of the government.

Ressa’s lawyers said the charge did not allege that RHC was “regularly engaged in the purchase of securities and resale” of securities, or that it “buys securities and re-sells them to customers.”

The charge that RHC merely issued and sold PDRs is “totally different from buying and reselling the securities under our law,” they said.

“Clearly, therefore, the information should be quashed for failure to allege an essential element of the crime charged.”

The lawyers also faulted the DOJ for “unnecessarily splitting” the case in the Pasig court to another four before the Court of Tax Appeals (CTA).

The facts of the Pasig case are “intimately related” to the CTA cases, as the DOJ itself purportedly deemed “the transactional activities of RHC to form part of a sequence that constituted securities dealing within a single tax year.”

The facts of all five cases, as alleged by the DOJ, arise from the same PDR transactions as well, Ressa’s lawyers argued.

Asked why one tax case was filed separately from the others, Justice Secretary Menardo Guevarra said he was not sure, but surmised that it may have something to do with jurisdictional requirement in relation to provisions of the Tax Code were allegedly violated by the defendants.

Ressa’s motion to quash contended that the Bureau of Internal Revenue (BIR), the complainant before the DOJ, did not specify the type of tax that is supposedly due. As such, it said that the case cannot allege that VAT is due from RHC.

It cited the Supreme Court’s ruling in CIR vs. Fortune Tobacco, where the fact that tax is due must first be proved before one is prosecuted under Section 255 of the Tax Code.

For his part, Guevarra said he has to trust that the BIR “followed the proper procedure before filing the criminal complaint for tax evasion.”

Ressa told the court that it is “public knowledge” that the cases against her and Rappler “are precipitated by the statements they have made against the executive arm of the government and the criticisms they raised on the war on drugs.” —VDS, GMA News