Hard-hitting Philippine news site faces tax evasion charge

A guard opens a door at the office of Rappler in Pasig Metro Manila Philippines Jan 15 2018

A guard opens a door at the office of Rappler in Pasig Metro Manila Philippines Jan 15 2018

In a Resolution dated October 2, Assistant State Prosecutor Zenamar J.L. Machacon-Caparros found probable cause to indict RHC, Ressa and Baladiang for willful attempt to evade or defeat tax and willful failure to supply correct and accurate information punishable under Sections 254 and 255, respectively, of the NIRC.

Based on the complaint, RHC and Ressa failed to indicate in RHCs 2015 tax returns the total gain of nearly P162.5-million, which was due to the issuance of Philippine Depositary Receipts (PDR) to Washington DC-based NBM Rappler LP, a unit of North Base Media and Omidyar Network Find LLC (Omidyar).

The indictment was made public on the day that Ressa received the 2018 Knight International Journalism Award (November 9, Manila time) in Washington, DC, for Rappler's innovation and exposés on corruption despite the obstacles thrown its way.

The case stemmed from the complaint of the Bureau of Internal Revenue (BIR) filed in March, accusing RHC of failing to pay P133 million worth of taxes when it issued PDRs. Based on the complaint, Rappler Holdings Corp.

"This case against Rappler is a clear assault on press freedom in the Philippines and part of the Duterte government's attempt to evade scrutiny and accountability", Human Rights Watch director for Asia, Brad Adams, said in a statement.

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Maria Ressa, the CEO of the Philippine news website Rappler, said Monday that her reporters would not be silenced in the face of tax evasion charges, telling CNN that "journalists are more important today than ever". The subscription price for said PDRs was P181.6 million. "As such, its value depends on the value of its underlying asset - which is the shares of stock of a corporation". And the second front, she said, was "lies on social media" that are "actually the basis of numerous cases that were filed against us by the government".

The justice department's statement said that the state prosecutor had dismissed Ressa's defence that "the non-declaration of such gain was neither intentional nor wilful".

On the other hand, Guevarra assured the respondents that the tax case that will be filed is "without prejudice to the filing by the respondents of a motion for reconsideration or petition for review with the DOJ".

As the latest legal case against Rappler mounts, supporters from around the world have rallied behind Ressa.

The owner of Rappler's PDR - the US-based Omidyar Network and North Base Media - later divested their shares and transferred them to Rappler employees.

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