Rappler, a leading news and fact-checking organization in the Philippines, just won a consolidated tax evasion lawsuit that has been ongoing for four years. Though there are still charges pending, this is a big win for Rappler, which has been hampered by the Philippine government’s enduring campaign against critical press coverage since 2018.
“Today, we celebrate the triumph of facts over politics,” Rappler wrote in a statement.
The Philippine Court of Tax Appeals acquitted Rappler on four charges of tax evasion that had been filed by the administration of former Philippine President Rodrigo Duterte.
“We thank the court for this just decision and for recognizing that the fraudulent, false and flimsy charges made by the Bureau of Internal Revenue do not have any basis in fact,” Rappler said in a statement. “An adverse decision would have had far-reaching repercussions on both the press and the capital markets.”
When asked whether this decision could be a signal that the current administration might be more lenient with Rappler than Duterte’s, a spokesperson for Rappler said “we’ll watch and see.”
Maria Ressa, CEO of Rappler and Nobel laureate, was also acquitted of the charges. While Ressa is still facing some legal challenges, prior to this ruling, Ressa had been looking at over 100 years of imprisonment. A cyber-libel case is still in the books, with several related legal challenges.
Rappler was accused of violating the constitution when it issued Philippine Depositary Receipts to the Omidyar Network. Since ownership of media organizations in the Philippines is limited to Filipinos or Philippine organizations, the Philippine Securities and Exchange Commission (at the time under President Duterte) opened a case against Rappler, accusing it of being foreign-owned and therefore unconstitutional.
However, PDRs are a certificate of investment that can be legally owned by non-Filipinos. And, unlike stocks, they don’t confer direct ownership and are commonly used by media groups around the world.
On Jan. 18, the Philippine Court of Tax Appeals unanimously voted that Rappler’s issuance of PDRs to the Omidyar Network was non-taxable, the crux of the tax-evasion case.
“There is nothing in the wordings of the PDR instruments and the PDR subscription agreements that would show the foreign entities North Base Media and Omidyar Network will become owners of the shares of stock of Rappler,” the court wrote.
Ressa’s lawyer, Francis Lim, said if PDRs were declared taxable income in the Philippines, “every business seeking to raise capital would be affected.”
“Today, facts win, truth wins, justice wins,” Ressa said. “Perhaps, to those who troll Rappler and those who believe the lies against Rappler, we have already proven that Rappler is not a tax evader.”
“Four down. We look forward to the quick resolution of the rest of the charges against Rappler,” said Ellen Tordesillas, co-founder of VERA Files, a Philippine investigative and fact-checking outlet. “Nobody deserves the harassment Rappler went through under Duterte.”
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