TOKYO (TR) – Nine companies in a group that runs host clubs and about 30 hosts have been accused by the Tokyo Regional Taxation Bureau of concealing a total of about 2 billion yen in income, reports the Yomiuiri Shimbun (Oct. 31).
Host clubs have been subject to some unscrupulous business practices, such as forcing female customers into large amounts of debt. This case brings to light new cases of unfair tax evasion.
As a result of the claim, the nine companies are expected to pay a total of about 200 million yen in corporate tax, including a heavy surcharge, and the hosts are expected to pay a total of several hundred million yen in income tax.
Sources say that the tax investigation was conducted on FG Group, located in Shinjuku Ward. Also targeted was the group’s eight host club-management companies under its umbrella and about 30 hosts working at the group’s clubs.
The eight companies that operate the clubs recorded a total of about 300 million yen as “know-how usage fees” to a corporation in the Federated States of Micronesia. The corporation was represented by the male founder of FG Group, but the payments were not actually made, with the group found to have stated inflated expenses and reduced income.
FG Group was also found to have concealed about 300 million yen in income by recording fictitious outsourcing expenses and other means.
Most of the approximately 30 hosts did not file tax returns. As well, there were confirmed cases whereby records of compensation issued by the clubs were destroyed, resulting in concealment of a total of several hundred million yen in income.
Combined with the total of about 600 million yen for the nine companies, the total amount of concealed income is thought to be about 2 billion yen. FG Group’s lawyer said in an interview, “We had no intention of concealing income, but ultimately followed the National Tax Agency’s instructions. We will provide appropriate guidance to the hosts in the future.”
