The local government of Makati City in the Philippines has issued a closure order to Smart Communications. This was due to the company operating without a business permit since 2019 and owing the city over PHP 3.2 billion ($66 million) in franchise tax from 2012 to 2015.
The closure order directs the shutdown of Smart’s headquarters in Ayala Avenue in Makati for violating a section of the Revised Makati Revenue Code. The order followed an examination by the Office of the City Treasurer in 2016. Smart has not settled its franchise tax deficiency nor obtained relief from the courts, Makati officials said.
Smart Communications has confirmed that it is in communication with the local government of Makati City, Philippines. This was after the city issued the closure order PLDT mobile unit for operating without a business permit. In response, Smart said it remains committed to complying with Makati City’s tax ordinances and applicable national laws.
In 2018, Smart filed a petition for review against Makati City Treasurer’s notice of assessment. During the process, it challenged the Makati court’s decision before the Court of Tax Appeals in 2022. However, the company has yet to bring the case to the Supreme Court.
In 2022, CTA rejected Smart’s plea and upheld the Makati court’s ruling. The CTA further held that, in accordance with the Local Government Code, Makati “had the jurisdiction to scrutinize Smart’s whole operations.”
Smart has not yet petitioned the Supreme Court, according to Makati.
According to Makati, firms operating without a permit in the city have come under increased scrutiny. Due to a paucity of business licenses, Makati’s Business Permits and Licensing Division had to close 191 enterprises last year.
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