SC Upholds ₱1.3-B Makati Tax Liabilities

The Supreme Court (SC) has upheld with modification Makati City’s tax liabilities worth P1.33 billion for 1999 to 2001 and 2002 to 2004.

Photo Insert: Makati and the BIR settled on a compromise of P100 million for the tax liabilities from 1999 to 2001, with the city government paying P20 million that year but a newly appointed regional director in 2006 rejected the compromise deal.

In a resolution dated March 15 and made public on July 18, the tribunal ordered the Bureau of Internal Revenue (BIR) to impose a 20% interest until 2017 for unpaid taxes. It said Makati had admitted its liability by failing to contest the tax bureau’s assessments.

“On top of that, the city of Makati did not submit any relevant documents to support its protest,” the High Court said.

In 2002, the BIR regional director of Makati assessed the city of tax liabilities worth P1.04 billion from 1999 to 2001 and P217.8 million from 2002 to 2004.

They agreed on another compromise of P100 million to settle the tax liabilities for 2002 to 2004 on the condition that 30% of the amount would be paid by the end of October of that year.

Makati and the BIR settled on a compromise of P100 million for the tax liabilities from 1999 to 2001, with the city government paying P20 million that year but a newly appointed regional director in 2006 rejected the compromise deal.

The High Court ordered the BIR to deduct the initial payments already made by Makati worth P400 million and P301.98 million for the covered years.

In 2007, the BIR ordered the collection of P1.15 billion still due from Makati City, forcing it to elevate the case to the Court of Tax Appeals.

Makati argued that the collection of taxes was a disservice to residents, saying basic services would be affected. The appellate tax court dismissed Makati City’s appeal to set aside its deficiency value-added tax and withholding compensation taxes, saying it had failed to file the claim on time.

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