Philippines Justice Department Approves Tax Case against Rappler

Mark Navales
Cotabato, Philippines
181109-PH-rappler-620.jpg Rappler CEO Maria Ressa (center), walks with her lawyers to the Philippines National Bureau of Investigation in Manila to respond to a cyber libel complaint filed against the online news organization, Jan. 22, 2018.

The Philippines justice department approved filing a tax evasion case against Rappler, a popular online news site critical of President Rodrigo Duterte’s drug war that has left thousands dead since 2016, officials said Friday.

The Bureau of Internal Revenue is expected to file a complaint next week for what it claims was a willful attempt to “evade or defeat tax” by supplying inaccurate information.

“The National Prosecution Service (NPS) has found probable cause to indict Rappler Holdings Corp., its President Maria Ressa and its independent Certified Public Accountant Noel Baladiang for violation of the National Internal Revenue Code or the tax code,” justice spokesman Markk Perete said in a statement, according to Rappler’s website.

The decision stemmed from an accusation that Rappler misrepresented tax returns when it issued “Philippine Depository Receipts” (PDR), including to foreigners, to net 162.5 million pesos (U.S. $3 million).

Previously, the government corporate regulator sought to shut down the website, saying it operated unlawfully because under Philippine constitutional rules, a media entity may be owned by Filipinos only.

The move triggered widespread protests, with media groups saying it was a vendetta by Duterte for Rappler’s stories about his drug war. The president once accused Rappler of being controlled by the U.S. Central Intelligence Agency without giving any proof.

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. But the government has pursued the case against the online site.

“We are not at all surprised by the decision, considering how the Duterte administration has been treating Rappler for its independent and fearless reporting,” the company said in a statement Friday. “We maintain that this is a clear form of continuing intimidation and harassment against us, and an attempt to silence journalists.”

Rappler lawyers went to the justice department Friday morning to follow up on the case, but were told that it had not yet been docked, according to the statement.

Lawyer Francis Lim stressed the company did not evade payment of any tax obligations in relation to the PDR, and argued that the case “has no legal leg to stand on.”

“The resolution will have a chilling effect on those who have raised and will raise capital through the issuance of PDRs and is a blow to the development of our already laggard capital markets. We will pursue all legal remedies and we are optimistic that we will prevail in the end,” Lim said.

Reporters banned

Meanwhile, Rappler’s reporters have been banned from covering all presidential activities since February.

Rappler can return and assign a reporter at the presidential palace beat once it can prove that it is legitimately owned by Filipinos, Duterte said at the time.

Despite Duterte’s criticism, Rappler’s coverage of the Philippine drug war won this year’s Knight International Journalism Award.

“They tried to shut us down at the beginning of the year, alleging we’re foreign-owned, that we’re tax evaders, along with other more ridiculous charges. I’ve run out of synonyms for the word ridiculous,” Ressa said as she accepted the award Thursday night in Washington.

“Why should you care? Our problems are fast becoming your problems. Boundaries around the world collapse and we can begin to see a kind of global playbook,” she said, according to the text of the speech posted on Rappler’s website.

Dennis Jay Santos in Davao and Jeoffrey Maitem in Cotabato contributed to this report.

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