Tax court to proceed with Rappler’s tax evasion case

MANILA, Philippines — The Court of Tax Appeals (CTA) has ruled to proceed with the trial of the P70.228-million tax evasion cases filed by the Department of Justice (DOJ) against Rappler Holdings Corp. (RHC) and its chief executive officer, Maria Ressa.

In a resolution promulgated on Feb. 7 and obtained by reporters yesterday, the CTA First Division denied RHC and Ressa’s motion to quash the cases and/or to suspend the proceedings. 

The tax court found no merit in RHC and Ressa’s argument that the DOJ violated their right to due process as it allegedly filed the cases without resolving first their motion for reconsideration on the DOJ’s Nov. 23, 2018 ruling finding probable cause to charge them in court. 

The First Division said the arguments of the accused were rendered moot as the DOJ had issued a resolution on Nov. 29, 2018 denying RHC and Ressa’s motion for reconsideration.

The RHC is the holding company of Rappler Inc., the owner of the news website.

The First Division has also dismissed RHC and Ressa’s claim that the court’s jurisdiction on the cases is still questionable as it still has a pending administrative case filed by the Bureau of Internal Revenue before the Pasig City Regional Trial Court on Nov. 14 covering the same alleged tax defficiencies.

The tax court said the criminal case can proceeed simultaneously and separately with the administrative case.

“As to the pendency of the administrative case against the accused instituted by the BIR, this should not be a bar to the institution of the criminal proceedings before this Court as it is well-settled that an assessment is not necessary before a criminal charge for tax evasion may be instituted,” the resolution read.

Lastly, the court found no merit on Ressa and her company’s claim that the facts contained in the charge sheets do not constitute offenses.

“As regards the allegation of the accused that the facts charged do not constitute an offense, we find the language and the wordings therein sufficient to constitute the crimes charged under Sections 254 and 255 of the 1997 NIRC (National Internal Revenue Code),” the court said.

“The Supreme Court has ruled that a (case) information need only to state the ultimate facts constituting the offense and not the finer details of why and how the crime was committed,” it added.

The ruling was signed by CTA Presiding Justice Roman del Rosario and Associate Justices Esperanza Fabon-Victorino and Catherine Manahan.

The cases involve three counts of violation of Section 255 of NIRC over the RHC’s alleged failure to supply correct information in its value-added tax (VAT) returns and income tax return (ITR) for the third and fourth quarters of 2015.

Ressa and the RHC were also charged with one count of violation of Section 245 of the NIRC over alleged attempt to evade payment of taxes in 2015 for the income in the sale of Philippine depositary receipts (PDRs) to NBM Rappler LP and Omidyar Network Fund LLC. 

The DOJ said the RHC and Ressa deprived the government of a total of P70.228 million in liabilities exclusive of surcharges and interests.

In its ruling, the First Division said the RHC’s claim that it is not a dealer of securities “is a matter which can be ventilated by the presentation of evidence during trial.”

The First Division set the pre-trial of the cases on March 13. The court directed the prosecution and the defense to submit five days before that date their respective pre-trial briefs containing the list of the evidence and witnesses they intend to present during the trial proper.