Smart clarifies tax case due to assessment of dues, not tax evasion

Smart Communications Inc. on Wednesday clarified that its tax case in Makati City is over the assessment of its local franchise dues, contrary to reports citing tax evasion.

"At the outset, we wish to clarify the issue: this case stems from a dispute over the correct assessment of local franchise taxes by the Makati City government," it said in a statement.

"Contrary to some published reports, it does not involve tax evasion," it elaborated.

The Makati City government in March 2018 assessed local franchise taxes at P3.2 billion for the taxable periods 2012 to 2015, including penalties.

Smart claimed that the assessment was computed based on its total nationwide revenues.

In response, Smart filed a case with the Regional Trial Court (RTC) of Makati, where the local government unit filed a motion for production of various documents from Smart.

Smart then appealed such ruling to the Court of Tax Appeals (CTA), which denied the company's prayer for a temporary restraining order (TRO) and preliminary injunction.

The CTA also upheld the RTC ruling which allowed Makati City to open the books of Smart as possible evidence in the P3.2-billion tax case.

"It is important to note that the CTA has not decided on the LFT liability of Smart to the City of Makati. It only pertains to the ruling of the RTC granting Makati City’s motion for production of records and various documents in connection with the main LFT case," Smart said Wednesday.

"That case, which involves the contested tax assessment, remains pending with the RTC," it explained. —Jon Viktor Cabuenas/KG, GMA News