Dept. of Justice indicts Rappler for tax evasion

Rappler is now in a very deep hole.

The Department of Justice indicts online news outfit Rappler, its Chief Executive Officer Maria Ressa and its independent certified public accountant Noel Baladiang for tax evasion.

Rappler has violated the Tax Code, said assistant State prosecutor Zenamar Machacon-Caparros.

 

Rappler's CEO Maria Ressa (photo credit to owner)

Last March the Bureau of Internal Revenue cited Rappler Holdings Corp. (RHC)for alleged "willful attempt to evade or defeat tax" and its "deliberate failure to supply correct and accurate information" in its 2015 tax return.

BIR said that Rappler Holdings Corp.(RHC) bought a total pf 119,434438 common shares from Rappler, Inc. at P1 per share and "acted as a middleman whose profits were taxable under the Tax Code."

It maybe recalled that Rappler ‘s registration was revoked by the Securities and Exchange Commission (SEC) for its non-compliance with the constitutional limit for foreign ownership of media companies.

Then BIR filed the tax evasion case against Rappler Holdings Corporation.

RHC is the parent company of the online news media outfit Rappler Incorporated whose primary purpose is to buy and sell real and personal properties, according to the BIR.

The BIR made a statement then that the RHC there was "deliberate failure" by RHC to provide correct information in its income tax return and value added tax (VAT) in 2015.

It said RHC bought shares amounting to P19.25 million from Rappler Incorporated and then issued and sold Philippine Depository Receipts (PDRs) worth P181M to two foreign entities.

No income tax and VAT were paid by RHC in 2015 for the income it gained in the PDR transactions, BIR said.

"As a consequence of its acts and omissions, the aggregate tax liability of RHC amounted to P133,841,305," BIR said.

The BIR also filed a complaint against accountant Noel Baladiang of RG Manabat & Company "for signing and certifying the financial statement of RHC despite the clear omission and misstatement of his client."

The outspoken Rappler CEO, Maria Ressa called the action by the BIR as “ludicrous” and urged the BIR to "check its own records." Rappler has been paying its taxes accurately, promptly, and diligently, with no less than the BIR commending it as one of Revenue Region 7's top 500 corporate taxpayers.

"This is clear intimidation and harassment. The government is wasting its energy and resources in an attempt to silence reporting that does not please the administration," CEO Ressa said.

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Report from ABS-CBN News