The Makati City government on Monday ordered the closure of the main office of Smart Communication for allegedly operating without a business permit over the last four years as well as failing to settle its P3.2-billion franchise tax deficiency.
In a report from RH Christian Maño, the Makati government said Smart’s headquarters in Barangay San Lorenzo on Ayala Avenue violated Section 4A.01 of the Revised Makati Revenue Code or City Ordinance No. 2004-A-025.
WATCH: Pagpapasara ng Makati City sa opisina ng isang kilalang telecom company dahil sa umanoy kawalan ng business permit mula 2019 | @dzrhnews
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The order was the result of the findings of the Office of the City Treasurer in 2016, which concluded that Smart owed the city government over P3.2 billion in franchise tax from January 2012 to December 2015.
Makati City Administrator Claro Certeza said they had already requested Smart to submit a breakdown of revenues and business taxes paid in all branches nationwide, but the firm refused to present the documents.
“When businesses in Makati choose to operate without a valid business permit, they are essentially operating outside the law. This is unacceptable, and I want to make it clear that we will not tolerate this kind of behavior, whether you are a big or small company,” he said.
In 2018, Smart filed a petition for review before a Makati Regional Trial Court seeking to nullify the Office of City Treasurer’s Notice of Assessment, which states that the telecommunications giant did not pay the franchise tax.
During the trial, Makati City filed a motion for the production and inspection of documents, which the court granted. However, in 2019, Smart filed an opposition against Makati’s motion and challenged the court’s decision before the Court of Tax Appeals (CTA).
In 2022, CTA denied Smart’s petition and affirmed the decision of the Makati RTC.
Smart argued that Makati City has no jurisdiction to audit the company’s financial statements and operations in other branches nationwide, adding that it had submitted all records related to its operations within the city and paid the necessary taxes.
Smart Communications have yet to comment on the matter, as of posting.
