The Court of Tax Appeals (CTA) has junked the appeal of the government seeking to overturn its acquittal of Nobel Laureate Maria Ressa and Rappler Holdings Corporation (RHC) of tax evasion charges on the P162.5 million earned by the news outfit from the 2015 issuance of
shares to two foreign entities.
In a resolution dated May 18, the CTA denied the motion filed by government lawyers on Feb. 2, 2023, to reconsider the judgment of acquittal handed down by the appellate tax court on Jan. 18, 2023.
“This Court adheres to the finality-of-acquittal doctrine that prescribes that a judgment of acquittal can no longer be reconsidered because it violates the Constitutional provision against double jeopardy,” the CTA said, in a resolution written by Associate Justice Catherine T. Manahan of the CTA’s First Division.
“The CTA cited Section 21, Article III of the 1987 Constitution whichstates: “No person shall be twice put in jeopardy of punishment for the same offense. If an act is punished by a law and an ordinance, conviction or acquittal under either shall constitute a bar to another prosecution for the same act,” the CTA added.
The appellate tax court stressed that the motion for reconsideration pointed out that Ressa and RHC “filed its annual ITR (income tax return) and quarterly VAT (value added tax) returns for taxable year 2015 indicating zero declarations of income and sales in spite of the income it derived from the purchase of shares of Rappler Inc.’s (RI) and their subsequent re-sale to NBM Rappler and Omidyar Network (ON) through the issuance of the Philippine Depository Receipts (PDRs).”
“The alleged income tax deficiencies of accused RHC stems from the theory of plaintiff (government lawyers) that RHC earned trading
income from the issuance of PDRs to foreign entities, namely NBM Rappler and ON on various occasions,” it cited.
The CTA said that one of the essential elements of the crimes charged is “accused RHC’s alleged willful failure to pay the corresponding
income tax and VAT for taxable year 2015 as a dealer in securities that derived trading income from the purchase and sale of securities
as evidenced by the PDRs.”
“The Court, in the assailed Decision, exhaustively discussed and resolved these issues and ruled that RHC is not a dealer in securities
and neither did it earn any trading income from the issuance of PDRs to foreign entities, namely, NBM Rappler and ON. This Court will no
longer belabor the justifications and discussions made in disposing of said issues as these will merely repeat the disquisitions and rulings
embodied in the assailed Decision,” it stressed.
In its Jan. 18, 2023 decision, the CTA ruled: “There is nothing in the wordings of the PDR (Philippine Depositary Receipts) Instruments and
the PDR Subscription Agreements, that would show that the foreign entities NBM and ON will become owners of the shares of stock of RI
(Rappler) upon issuance of the PDRs.”
It said that PDR holder “only retains an option to purchase the underlying shares of RI subject to certain conditions, e.g. that there
is no law restricting foreign ownership in the business of the operating entity.”
“In sum, since accused is not required to pay the income tax and VAT on the PDR transactions for the taxable year 2015, the elements of
Sections 254 (attempt to evade or defeat tax) and 255 (failure to file return, supply correct and accurate information, pay tax, withhold and
remit tax and refudnexcess taxes withheld on compensation) of the 1997 NIRC (National Internal Revenue Code), as amended, are rendered
nugatory and without legal support. The plaintiff, therefore failed to prove the guilt of the accused beyond reasonable doubt,” the CTA
declared in its decision.
Associate Justices Jean Marie A. Bacorro Villena and Marian Ivy F. Reyes Fajardo concurred in the resolution that denied the motion for
reconsideration. CTA Presiding Justice Roman G. Del Rosario inhibited himself.