Metro Manila (CNN Philippines, July 20) — The Supreme Court (SC) has ordered the Makati City government to pay the Bureau of Internal Revenue (BIR) deficiency taxes worth over ₱1.2 billion, in addition to interests.
The court rejected the local government’s petition for review and motion to dismiss the case, which covers deficiency taxes from 1999 to 2001 that add up to around ₱1.04 billion, and from 2002 to 2004 amounting to over ₱217 million.
It issued the resolution on March 15, but the copy of the document was uploaded on its website only recently.
In handing down the verdict, the high court affirmed with modification a 2011 decision and a 2012 resolution released by the Court of Tax Appeals (CTA) en banc on the matter.
The SC directed the BIR to deduct from its collection the payments already made by Makati in previous years which total ₱701.9 million.
The court also ordered the bureau to impose deficiency and delinquency interests at 20% per annum on the basic deficiency taxes and on the total amount, as well as another delinquency interest at 12% per annum on the unpaid amount.
In 2007, Makati filed a protest letter before the Commissioner of Internal Revenue (CIR), as it argued that the BIR erred in its assessment of the city’s tax liabilities. However, the CIR dismissed this, saying the appeal filed by the local government was made beyond the prescribed period.
Makati then elevated its protest to the CTA, but the court’s second division junked the petition in 2009 for lack of merit.
The city moved for reconsideration, but the CTA en banc merely affirmed the second division’s ruling, prompting Makati to bring the case to the SC.
CNN Philippines has sought comment from the Makati government.
