CTA clears Ressa of four counts of tax evasion charges


THE Court of Tax Appeals (CTA) yesterday acquitted Nobel Laureate Maria Ressa and Rappler Holdings Corporation (RHC) of four counts of tax evasion charges.

The ruling, which was issued by the CTA’s First Division, held that the prosecution “failed to prove the respondents guilt beyond reasonable doubt.”

The case stemmed from the complaint filed by the Bureau of Internal Revenue (BIR) before the  Department of Justice (DOJ) in 2018.

Based on the complaint, RHC and Ressa failed to indicate in RHCs 2015 tax returns the total gain of almost 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).

PDRs are financial instruments used by some entities to receive foreign investment without violating the constitutional requirement of full Filipino ownership.

In November 2018, the DOJ found probable cause to file tax evasion charges against RHC and Ressa before the CTA. 

“No civil liability may be adjudged against the accused as the alleged unpaid tax obligations have not been factually and legally established and proven,” the CTA said in a 90-page decision. 

The CTA said it  found nothing in the wordings of the PDR Instruments and the PDR Subscription Agreements, that would show that the foreign entities NBM and Omidyar  will become owners of the shares of stock of Rappler  upon issuance of the PDRs.

“Paragraph 4 of the PDR Instrument, stipulates that the ownership of the shares of stock of RI remains with the issuer RHC,” the CTA said in a 90-page decision.

The tax court pointed out that the PDR holder in the case only has an option to purchase shares subject to certain conditions. 

Thus, the  PDR holders many not exercise ownership of the shares and are just investors. 

In a statement, IBON Foundation said Ressa and Rappler’s acquittal of the tax evasion charges is the latest victory against the previous  Duterte administration which filed several suits against the online news company.

“The firing line against attacks on media freedom, civic space and democracy has always been strong but this decision and recent others like it by courts unafraid to uphold the rule of law are well-received,” IBON   said.