Makati orders closure of main office of Smart Communications
The local government of Makati ordered on Monday the closure of the main office of Smart Communications Inc. following its failure to secure a business permit to operate in the city.
In its Facebook post on Monday, Makati City Government said its "inspectors from the city’s Business Permits and Licensing Office (BPLO) today served a closure order to Smart Communications Inc. for failing to secure a business permit since 2019."
In an order of closure dated February 23, Makati noted that Smart’s headquarters, located at 6799 Ayala Ave. in Barangay San Lorenzo, violated Section 4A.01 of the Revised Makati Revenue Code or City Ordinance No. 2004-A-025.
“You are hereby commanded to cease and desist from further operating your business establishment until such time compliance with the said ordinance is made,” the order stated.
The city noted that presently, "Smart has failed to settle or obtain any relief from the courts over its franchise tax deficiency worth over P3.2 billion covering the period January 2012 to December 2015."
According to the Makati City government "the case stemmed from an examination launched by the Office of the City Treasurer in 2016, which concluded that Smart Communications Inc. owed the city government over P3.2 billion in franchise tax over the four-year period.
Makati City Administrator Claro Certeza said the city had requested Smart to submit a breakdown of revenues and business taxes paid in all branches nationwide, but the telecommunications giant 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 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. During the trial, the City Government of Makati filed a motion for production and inspection of documents, which the court granted.
However, on May 31, 2019, Smart filed a comment/opposition against Makati’s motion and challenged the court’s decision before the Court of Tax Appeals (CTA) and in 2022, the CTA denied Smart’s petition and affirmed the decision of the Makati RTC Branch 155.
Smart argued that the 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 but the CTA, however, said that Makati has the authority to investigate Smart’s entire operations under the Local Government Code.
Smart Communications Inc. has yet to elevate the case to the Supreme Court.
Mayor Abby Binay reminded all businesses in Makati to comply with the laws and obtain the necessary permits before they start their operation.
“I am committed to making sure all businesses are operating legally. It is important for businesses to know that we take these matters seriously and will take action when necessary,” said Binay.
In 2022, the Makati City Business Permits and Licensing Office also shut down a total of 191 business establishments due to lack of business permits. Robina Asido/DMS
