MANILA (UPDATE) — The Makati City government on Monday shuttered the main office of Smart Communications Inc for allegedly operating without a business permit since 2019 and for supposedly failing to pay a franchise tax deficiency of over P3.2 billion.

The LGU released photos of the closed Smart office located at 6799 Ayala Ave. in Brgy. San Lorenzo on Monday.

Makati City Administrator Claro Certeza said in the coming days they will also padlock all other Smart offices in Makati if the telco fails to pay its tax obligations.

Certeza said the closure order stemmed from a tax deficiency from 2012- 2015. He said Smart contested this in the courts, but failed to obtain relief.

"Smart is claiming na hindi lahat nung kinita nila ay nangyari dito sa City of Makati, and we just asked them please present the other tax payments to other LGUs so that we will conclude which portion which will remain will be for Makati, but they refused," said Certeza.

By 2019, Makati did not issue a business permit to Smart. And after several legal battles, the Makati LGU decided to stop the operations of the telco.

"As of now, Smart has no business permit within Makati so they have to be closed," he added.

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In an order of desistance/closure on Feb. 23, the LGU said Smart's headquarters violated the Revised Makati Revenue Code.

“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 read.

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

But the court granted a motion for production and inspection of documents filed by the LGU, it added. On May 31, 2019, Smart filed an opposition against Makati's motion before the Court of Tax Appeals. However, the CTA denied Smart's petition in 2022, the local government added.

In a statement, Smart 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.

"Smart has filed the appropriate cases to resolve outstanding legal issues; these cases remain pending," it added.

Smart said its legal team is in touch with Makati LGU. It also assured the public that its services would remain available and accessible to subscribers."

Makati Mayor Abby Binay said the city is upholding the rules for businesses operating in its jurisdiction.

“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,” she said.

In 2022, the city shut down 191 business establishments for lacking business permits, she said.

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