By: CMFR Staff
Posted on: September 15, 2023, 4:40 pm
ON SEPTEMBER 12, Pasig City Regional Trial Court Branch 157 acquitted Rappler Holdings Corporation (RHC) and its president and Nobel Peace Prize laureate Maria Ressa of the fifth tax evasion charge filed by the former administration of Rodrigo Duterte. The court victory ended after four years and 10 months of trial.
In an 18-page decision, the Pasig court said the RHC did not act as a dealer in securities when it issued Philippine Depository Receipts (PDRs) to North Base Media, and that the PDR transactions were just in line with the RHC's purpose as a holding company. "It is thus not liable to pay VAT on these transactions under Section 105 of the Tax Code," the court explained.
The argument recalls the earlier acquittal of Ressa by the Court of Tax Appeals' (CTA). On January 18, 2023, the CTA cleared Ressa of all four tax evasion charges filed against her and her news organization.
In March 2018, the Bureau of Internal Revenue (BIR) and the Department of Justice, during the administration of former President Rodrigo Duterte, filed these charges against Ressa and RHC over the sale of their PDRs to two foreign entities - North Base Media and Omidyar Network - in 2015. PDR is a financial document that gives its holder the right to own stocks in and receive interest and dividends from a Filipino company. According to the BIR, RHC allegedly earned roughly PHP162.5-million from the transaction but failed to declare it in its tax return. A PDR is not equivalent to a share in the company; consistent with the Constitution, it does not amount to ownership.
"This is a victory not just for Rappler but for everyone who has kept the faith that a free and responsible press empowers communities and strengthens democracy," the news organization said in a statement as it welcomed the court's decision. It added that they share the win to the Filipino public and colleagues in the industry "who have been besieged by relentless online attacks, unjust arrests and detentions, and red-tagging.
In November 2018, the Securities and Exchange Commission (SEC) issued a closure order against Rappler for violating a constitutional provision limiting ownership and control of mass media to Filipinos after the media organization received funds from the abovementioned foreign entities. Rappler asserted that it was a 100 percent Filipino-owned company in its appeal against the SEC order pending before the Court of Appeals (CA).
The acquittal leaves only two remaining active cases against Rappler and its CEO: (1) Ressa and former Rappler researcher Reynaldo Santos Jr.'s appeal on their cyber libel conviction pending before the Supreme Court and (2) the appeal on the closure of Rappler pending at the CA.
CMFR previously noted that these cases were filed a few months after Duterte threatened to investigate the ownership of Rappler. Rappler was among the three news organizations critical of the former administration's policies.
CMFR welcomes this most recent acquittal; having protested these actions as politically motivated, an example of how laws can be weaponized to silence journalists and media organizations, and to suppress the Constitutionally-guaranteed freedoms of speech and of the press.