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Rappler Holdings Corporation (RHC) and its president, Maria Ressa, urged the Department of Justice (DOJ) on Monday to dismiss the P133.84-million tax evasion case filed by the Bureau of Internal Revenue (BIR).

• Rappler faces tax evasion complaint

In a joint counter-affidavit, RHC, which operates website Rappler, and Ressa argued the BIR’s allegation that Rappler is “engaged in the purchase of securities and resale thereof to customers” is false.

Rappler’s Maria Ressa reaffirms counter-affidavit before DOJ ASP Zenamar Caparros on BIR’s P133.84-M tax evasion case: pic.twitter.com/u8W9eVuGxg

— Ina Reformina (@InaReformina) May 7, 2018

“On various dates, RHC purchased common shares from Rappler, Inc. amounting to P19,245,975.00. RHC subsequently issued and sold Philippine Depositary Receipts (PDRs) on various dates to two foreign juridical entities for a total consideration of P181,658,758.67. RHC used the same common shares it purchased from Rappler, Inc. as the underlying asset/share of the PDRs.'

“The purchase of the shares and the subsequent sale of shares through the issuance of the PDRs for profit that transmitted economic rights (e.g. financial returns or cash distributions) derived from the equity of Rappler Inc. to the PDR holders is proof that RHC is engaged in the purchase of securities and resale thereof to customers,” the BIR complaint stated.

Rappler’s counter-affidavit pointed out that the BIR’s theory “is factually and, per our lawyers, legally baseless.”

“RHC is not a dealer in security. We understand the elements of tax evasion under Section 254 and misrepresentation under Section 255 are not present, specifically: (a) willfulness, (b) the illegality of the means employed, and (c) the goal was to profit from the transaction and evade the corresponding tax/es due. We did not commit the alleged crimes,” the counter-affidavit read.

Rappler’s Maria Ressa in DOJ for preliminary investigation hearing into P133.84-M tax evasion case filed by the Bureau of Internal Revenue: pic.twitter.com/cRoJlxCrRR

— Ina Reformina (@InaReformina) May 7, 2018

Rappler also added that the element of willfulness is absent since the issuance of PDRs “has never been considered a violation of the Tax Code.”

“In the Philippines, RHC is not the first to issue the PDRs. To date, we are not aware of any PDR issuer accused of violating the Tax Code on account of their fundraising activity. If the previous issuers have not been considered to be dealers in security and in violation of the Tax Code, we do not see how we could be in violation of the Tax Code or any tax regulation [as none has been issued by the [BIR],” the counter-affidavit stated, as Rappler and Ressa claimed the case against them is one of “selective justice, and will have a chilling effect on PDR issuers.”

• Rappler goes 'overboard' with tax payments, Ressa says

The counter-affidavit also stated that Rappler “never hid” its transactions and disclosed them in its reports to the Securities and Exchange Commission (SEC) and BIR.

“We understand from our lawyers that a taxpayer is not guilty of tax evasion when he reports the transaction in question in his financial statements provided to the BIR.”

Rappler said the PDRs and Rappler Inc. (RI) shares are not the same, and benefits to PDR holders are different from the benefit to RHC as shareholder of RI.

As to the BIR’s dependence on the SEC findings that PDRs and RI shares are the same, Rappler stressed the issue is pending before the Court of Appeals (CA), and prevents criminal prosecution prior to its resolution.

Ressa personally appeared before Assistant State Prosecutor Zenamar Caparros to reaffirm the counter-affidavit.

Rappler earlier accused the Duterte administration of using the tax rap as a form of "intimidation and harassment.”

“The government is wasting its energy and resources in an attempt to silence reporting that does not please the administration,” Ressa said in March.