Posts Tagged ‘tax evasion’

Tax auditors running out of cheaters, ponder purpose in life

Friday, October 12th, 2012

Pandora’s box

You know that the recession is getting serious when even the National Tax Agency is reduced to twiddling its thumbs. The amount of unclaimed income that tax investigators discovered last year was ¥19.2 billion, comprising a measly 189 cases, the lowest since 1978. Moreover, of all the cases they investigated, only 61.9 percent were prosecuted, the lowest rate since 1973.

It should be noted that these numbers actually apply to tax returns or lack of reporting that occurred in 2008, since it takes about three years for the agency to complete an investigation before deciding on whether to pursue prosecution. So these numbers could simply be a temporary dip owing to the fact that 2008 was the year of the Lehman Brothers failure that jump started the whole economic crisis. However, there are other factors at play.

A tax agency official recently told Tokyo Shimbun that “prosecutors’ attitudes” changed after several recent scandals in which the legality of their methods were questioned, in particular that case in Osaka where a prosecutor cooked up evidence to nail a health ministry bureaucrat. Consequently, prosecutors are a bit gunshy about borderline cases that they would have pursued more aggressively in the past. In addition, over the years tax evaders have become more skillful at hiding income thanks to advances in information technology and the globalization of finances.

But a former tax official told Tokyo Shimbun that he thinks the quality of the auditing has also gone down. When he was an investigator, new recruits were trained under the strictest, most punishing circumstances. Veteran auditors put the screws to their underlings to make sure they were tough and relentless in getting as much evidence against tax scofflaws as they could.

Continue reading about a change in tax audits →

Mahjong parlors go deeper underground to stay in business

Thursday, January 5th, 2012

As a disreputable pastime, mahjong doesn’t draw as much attention as racing sports or pachinko probably because as a game it’s relatively low key and whatever gambling goes on is between friends. In Japan, mahjong traditionally has been played by male college students and salarymen in smoke-filled “parlors” where participants rent tables by the hour and send out for food and alcohol. Like a lot of things that depend on disposable income, Japan’s mahjong industry has been hurting lately. Not only did the lingering recession eat away at the game’s clientele, but anyone with a mahjong jones can get their fix with computer and mobile phone applications. According to the National Mahjong Union, there were about 36,000 parlors nationwide in 1978, a number that remained fairly constant until the bubble burst at the end of the 1980s. By 2000, the number had dwindled to 20,000, and in 2010 there were only 12,700 mahjong parlors in Japan.

Against the wind: Entrance to mahjong parlor in Hama-cho, Tokyo

The Asahi Shimbun recently reported that many remaining parlors are desperately trying to attract new customers in order to stay in business and that some of these schemes have led to police crackdowns. The paper covered one struggling parlor in Osaka where it costs ¥1,800 to rent a four-person table for one hour, and most days the manager says they only manage to rent out about two tables. Another parlor in the vicinity has actually set up a no-smoking section behind glass in hopes that women and non-smokers will come. Still other parlors have set up bigger kitchens so as to offer a more diverse dining experience. There’s even a movement called “healthy mahjong” aimed at older and younger people that emphasizes daytime playing with no alcohol or betting, as well as the supposed brain-fortifying qualities of the game. Some parlors offer “classes” in how to play mahjong more enjoyably and effectively.

Traditional mahjong enthusiasts, however, will likely look askance at these developments, since without the drink and the smoke and the gambling mahjong holds little interest to them. The main problem is that a mahjong game requires four people, so some parlors have devised “free mahjong,” which means you can show up at a parlor by yourself and the manager will set you up in a game with employees. Instead of charging by the table and the hour, free mahjong parlors charge by the game., and since mahjong games can be relatively quick affairs, the profit rate is theoretically higher.

Continue reading about mahjong →

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