Pasig court acquits Nobel laureate Maria Ressa, Rappler of tax evasion

A Pasig court has acquitted Nobel Laureate Maria Ressa and Rappler Holdings Corporation (RHC) in a tax evasion case filed in connection with their supposed failure to declare tax in 2015.

According to the dispositive portion of the decision, the Pasig Regional Trial Court Branch 157 acquitted Ressa and RHC of violation of Section 255 of the National Internal Revenue Code (Tax Code) “on the ground that they did not commit the offense charged in the information.”

The court also dismissed the civil aspect of the case.

With this, Ressa and RHC have been acquitted in all five tax evasion charges filed against her under the administration of former President Rodrigo Duterte.

“Actually this is one of the five cases, tax evasion cases filed by the government in relation to the PDR transactions of Rappler… so we’re thankful that the court finally dismissed the fifth one and hopefully that’s the end of it,”  Atty. Francis Lim, Ressa’s lawyer, said in an interview with reporters.

Ressa, visibly happy, later extended her gratitude to the judge and the CTA.

In November 2018, the government accused Ressa of failing to declare "correct and accurate" information in quarterly sales receipts from RHC's issuance and sale of Philippine Depositary Receipts (PDR) worth P2.45 million to NBM Rappler.

This allegedly resulted in a value-added tax (VAT) deficiency of P294,258.58, excluding surcharge and interest, to the damage of the government.

A PDR is a security that grants the holder the right to the delivery or sale of the underlying shares of stock and is usually not evidence of ownership of a corporation.

However, the Pasig RTC said the RHC did not act as a dealer in securities when it issued the PDRs

“The PDR transactions were investment activities that were in line with RHC’s primary purpose as a holding company of [Rappler Inc.],” it said.

“RHC did not sell the PDRs to NBM in the regular course of its business to gain profit, but issued the PDRs as part of a larger scheme to legally raise capital for its subsidiary,” it added.

Due to this, the court said Rappler is not liable to pay VAT.

“At this point, it must be inevitably concluded that the RHC and Ms. Ressa did not violate Section 255 of the Tax Code. The PDR subscription price were not proceeds arising from the sale of the PDRs to NBM that should have been declared in RHC’s VAT return,” it said.

“As a result, it cannot be said that RHC willfully filed an inaccurate VAT return or that it is liable for any deficiency VAT relative to the PDR transaction with NBM,” it added.

In January, the Court of Tax Appeals acquitted Ressa and RHC of four tax evasion charges for failure of the prosecution to prove their guilt beyond reasonable doubt.

Foreign investments

Ressa, meanwhile, said that her win is a “good sign” for the country’s business and economy.

“Because the tax evasion charges threatened the way of doing business in the Philippines and this is a cornerstone of the Marcos administration, to bring the economy back up and to bring international investors in,” she said.

Atty. Eric Ricalde, another legal counsel, expressed hope that foreign investors will take note of the case.

“It’s no secret that among the Asian countries, we are lagging behind in terms of attracting foreign investments,” he said.

“So let’s hope and I think my own take here is that this acquittal, together with the earlier acquittal of the CTA will send a very strong signal to the international business community,” he added.

Hold the line

Ressa also called on her fellow journalists to hold the line.

“We’ve done things in the darkest times. We’re not out of the woods yet. Both journalism and democracy are under attack globally,” Ressa said.

Despite this, she said she observed a “lifting of fear” amid the transition from the Duterte administration, adding that she hoped this was not the calm before the storm.

“We feel it in the public, we feel it, even, I suppose among the cases, the journalist, it’s certainly a very interesting time for the Philippines. I hope it isn’t the calm before the storm. We hope that this, you know, as we’ve seen in other cases that have been resolved that rule of law is stronger,” she said.

“That facts remain. You know last January I said facts win, truth wins, and we can continue— justice… facts win, truth wins, and justice wins,” she added.

Rappler, in a separate statement, said the victory is for everyone who kept the faith that a free and responsible press empowers democracy.

“We share this with our colleagues in the industry who have been besieged by relentless online attacks, unjust arrests and detentions, and red-tagging that have resulted in physical harm,” Rappler said.

Ressa, 59, is currently on bail after she was convicted in 2020 for cyber libel. She maintained those cases were politically motivated.

A veteran journalist, Ressa was arrested in 2019 for a cyber libel case filed by the Department of Justice, which indicted her and a former reporter over a story Rappler published in 2012. —KBK/RSJ, GMA Integrated News