In a bizarre turn of events, the city government of Makati, the financial district of Manila, the Philippines capital, has reportedly padlocked the headquarters of wireless carrier Smart Communications over a tax and permit dispute.
It seems that all Smart offices in Makati are covered by the closure order, including in-mall branches.
It is claimed that Smart owes 3.2 billion pesos (about $57.84 million) in unpaid taxes — and that it has been operating for four years without a valid business permit issued by the city government.
The city government is quoted in Gulf News as saying: "To date, Smart has failed to settle or obtain any relief from the courts over its franchise tax deficiency worth over Php3.2 billion covering the period January 2012 to December 2015."
The city administration said in the closure order that the ordinance violated involves an annual charge for the issuing of a mayor's permit to businesses working in the city.
Smart has allegedly also refused to offer a breakdown of revenues and company taxes paid in all of its branches nationally.
For its part, Smart, a subsidiary of PLDT, the Philippines' largest telecommunications operator, apparently filed a review petition with the Makati Regional Trial Court (RTC) in 2018, seeking to discard the Office of City Treasurer's Notice of Assessment, which claimed that the company owed the city government billions of pesos in what is known as franchise tax.
Smart argued at the time that Makati has no jurisdiction to audit the company’s financial statements and operations in other branches nationwide.
Smart, whose subscriber numbers were estimated in November last year at just under 68 million, has assured the public that its services will remain available and accessible to its subscribers.
In a statement on the closure order Smart says it remains committed to complying with Makati City’s local tax ordinances, and with relevant national laws, applicable in respect of local taxation.
It adds: “Smart has filed the appropriate cases to resolve outstanding legal issues; these cases remain pending. Our legal and tax teams continue to be in touch with the Makati LGU on the matters at hand.”
