SC orders Makati to pay P1.26B in deficiency taxes

The Supreme Court (SC) has ordered Makati City to pay the Bureau of Internal Revenue (BIR) more than P1.26 billion in deficiency taxes plus interest for years 1999 to 2001 and 2002 to 2004.

In a resolution dated March 15, the court denied the motions of the city government and ordered it to pay P1.04 billion from 1999 to 2001 and P217.8 million from 2002 to 2004.

“In addition, the City of Makati is likewise ordered to pay deficiency interest and delinquency interest computed by the BIR,” the court said.

The SC ordered the BIR to impose a deficiency rate of 20% per annum on the basic deficiency taxes of the city, a delinquency interest rate of 20% per annum, and also a delinquency interest rate of 12% per annum.

Meanwhile, the BIR was directed to deduct P400 million and P301.9 million that the Makati government had already paid.

When sought for comment, the city government said it would soon release a statement on the matter.

The case stemmed from Makati’s petition for review on certiorari against a 2011 decision and 2012 resolution of the Court of Tax Appeals (CTA) En Banc that affirmed a decision and resolution of the CTA Second Division ruling in favor of the BIR.

In 2009, the CTA Second Division dismissed the petition filed by Makati seeking to nullify the Final Decision on Disputed Assessment issued by the BIR.—LDF, GMA Integrated News