THE City Government of Makati served on Monday, Feb. 27, 2023, a closure order against Smart Communications Inc. for its failure to obtain business permits and pay over P3.2 billion of its taxes.

In a statement, Makati City administrator Claro Certeza said the firm was operating without a business permit since 2019.

He said it also failed to settle or obtain any relief from the courts over its franchise tax deficiency worth more than P3.2 billion covering the period from January 2012 to December 2015.

“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,” Certeza said.

The closure order was released on Feb. 23, 2023.

In 2016, the city treasurer conducted an examination that revealed the firm’s multi-billion debt to the City Government.

Certeza said Smart refused to submit a breakdown of revenues and business taxes paid in all branches nationwide, which the City Government requested.

In a statement issued on Monday, Smart, the wireless arm of PLDT Inc., said it is committed to complying with tax laws. It said appropriate cases to resolve the issue are currently pending.

“Smart remains committed to complying with Makati City’s local tax ordinances, and with applicable national laws, in respect of local taxation,” the telco said.

The company further noted that it has filed the appropriate cases to resolve outstanding legal issues which now remain pending.

The telco said its legal team is in touch with the Makati local government. It also assured the public that its services would remain available and accessible to subscribers.

In 2018, Smart filed a petition for review before the Makati Regional Trial Court Branch 133 to seek the nullification of the Office of City Treasurer’s Notice of Assessment, which states that the telecommunications giant did not pay the franchise tax.

The court afterwards granted Makati’s motion for production and inspection of documents, and this was later challenged by Smart before the Court of Tax Appeals (CTA), saying that the City has no jurisdiction to audit the company’s financial statements and operations in other branches nationwide.

The firm said it has submitted all records related to its operations within the city and paid the necessary taxes.

In 2022, CTA denied Smart’s petition and affirmed the decision of the Makati RTC Branch 155.

It also gave the City Government the authority to investigate Smart’s entire operations under the Local Government Code. (SunStar Philippines,CSL)