MANILA, Philippines – The acquittal of Nobel laureate and Rappler CEO Maria Ressa and Rappler Holdings Corporation (RHC) of all tax evasion charges is a “good sign” for doing business in the Philippines, Ressa said on Tuesday, September 12.

“Facts win, truth wins, justice wins. But I think more importantly, you have to really look at the impact on business. 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. This is a good sign,” Ressa said.

Ressa and RHC were acquitted on Tuesday of their fifth and final charge of tax evasion related to their alleged violation of Section 255 of the Tax Code. In January, the Court of Tax Appeals acquitted Ressa and RHC of four charges of tax evasion that were filed in 2018 by the previous Duterte government

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Rappler statement on acquittal for tax evasion

‘Strong signal’

Rappler’s lead counsel Francis Lim said that the acquittal sends a “strong signal” to the international business community on what it means to do business in the Philippines.

“This is really not only [a win] for Maria and the Rappler Holdings, but a win for the Philippines because… among the Asian countries, we are lagging behind in terms of attracting foreign investments,” said Lim, adding that he hoped foreign business would see that the Philippines is “open for business.”

“No matter how many laws Congress enacts to entice business, if there’s something basically or fundamentally wrong with the rule of law, then no one will come here in the Philippines to do business,” he added.

ABS-CBN and GMA-7, two media giants in the Philippines, have also dealt with PDRs. But the Securities and Exchange Commission (SEC) said that it would not go after these media companies’ PDRs, as they were issued to the public, unlike Rappler’s.

The case concerned Rappler’s issuance of Philippine Depository Receipts (PDRs) to foreign investors. The Bureau of Internal Revenue and the Department of Justice under former president Rodrigo Duterte alleged that Rappler became a securities dealer in this deal, and generated a taxable income for which it must pay taxes.

Duterte falsely claimed that Rappler was unconstitutionally foreign-funded, with his government pointing to Rappler’s PDR issuances to North Base Media and Omidyar Network in 2015. But PDRs do not equate to ownership or control by the PDR holders – they are merely legal instruments that allow foreign entities to invest in Philippine companies, Rappler has held.

Rappler issued the PDRs to raise capital and grow its business, and not to earn profit. In Judge Ana Teresa Cornejo-Tomacruz’s decision, the court sided with Rappler in maintaining that it did not act as a dealer in securities with the PDR issuances, and was not liable to pay VAT

‘Not out of the woods yet’

Ressa also welcomed the acquittal in the realm of the continuing battle for press freedom in the Philippines. Her message to journalists was to keep fighting for embattled journalists.

“Four years and 10 months, but you got to have faith,” she said, referring to the length of the trial.

“Hold the line! We’ve gone through some of the darkest times. We’re not out of the woods yet. Both journalism and democracy is under attack globally,” she added.

Ressa said that it is “going to get harder” in the path forward, as social media has already been used to spread lies, and now, generative artificial intelligence potentially threatens democracy as well.

“We maintain that we’ve never done anything but our work, and we’ll continue doing our work,” said Ressa.

All tax evasion charges were filed under the Duterte administration. There remain two active criminal charges against Rappler, namely, involving the SEC’s revocation of Rappler’s license to operate, and Ressa’s cyber libel conviction pending at the Supreme Court. – Rappler.com