Rappler lawyers submit counter affidavit to tax rap at DOJ

Lawyers on Tuesday submitted the counter affidavit of Rappler CEO Maria Ressa and treasurer James Bitanga to the P133-million tax evasion complaint filed by the Bureau of Internal Revenue (BIR) last March.

The counter affidavit and supporting documents were submitted by the Rappler executive's lawyers based on an order by Assistant State Prosecutor Zenamar J.L. Machacon-Caparros.

Ressa has also been summoned to appear before the DOJ on May 7 for the same complaint.

Neither the BIR nor Rappler's lawyers gave statements to the media.

Lawyers of Rappler executives and a team from the Bureau of Internal Revenue attend a hearing at the Department of Justice on Tuesday, April 24, 2018, for the tax evasion complaint filed by the BIR against the company. Ian Cruz

Ressa, Bitanga, and Rappler Holdings Corporation (RHC) were named in a complaint by the BIR for alleged 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" in 2015.

The BIR accused RHC of failing to pay an aggregate tax liability of P133,841,305.75 despite allegedly profiting in 2015 from the sale of Philippine Depository Receipts (PDR) to two foreign judicial entities.

The complaint comes weeks after Omidyar Network, to whom Rappler sold more than seven million PDRs, donated its PDRs to 14 Filipino managers of the news site.

Omidyar stated that it has done so to eliminate the Securities and Exchange Commission's (SEC) ruling against Rappler Incorporated and RHC that caused the media company to lose its certificate of incorporation.

Ressa, on a later appearance for a cyber libel complaint, stated that the tax evasion suit assumed that RHC is a dealer in securities, which it is not.

She warned that other media companies who issue PDRs may also be subject to the same case as Rappler.

"We're not a dealer in securities. This means anyone, ABS-CBN, GMA-7, you guys have issued PDRs, right? Anyone who issues securities could be subjected to these same taxes. Anyone who buys securities," Ressa said.

"Again, this is a ridiculous execution of the law, and I'm assuming that coherent, critical-thinking minds are going to come in and go through," she continued.

The SEC accused Rappler of supposedly violating the foreign ownership restrictions on mass media companies for welcoming Omidyar as one of its investors through PDR sales. —With a report from Ian Cruz/KG/ALG/BM, GMA News