OSAKA (TR) – An operator of high-end hostess clubs in Osaka City’s bustling Kitashinchi nightlife district has lost his business and home after being indicted for failing to pay 86 million yen in taxes.
He reportedly boasted to investigators that “tax evasion is customary,” reports the Sankei Shimbun (Nov. 7).
The Osaka District Public Prosecutors Office’s Special Investigation Squad indicted the man without arrest following a criminal complaint filed by the Osaka Regional Taxation Bureau.
According to the indictment, the operator paid approximately 880 million yen in compensation to hostesses and male staff, known as kurofuku, across the three clubs he managed between September 2022 and December 2023.
However, he systematically failed to pay the required withholding income tax on these wages, evading roughly 86 million yen in total.
“Customary”
When questioned about the illegal practice, the operator showed little remorse. “Tax evasion is customary,” he reportedly stated.
Defending his failure to collect taxes from his male staff, he explained to authorities, “We hadn’t been deducting withholding tax for a long time, and if we withhold taxes, the staff will quit.”
Forfeiture of 3 clubs
The operator’s brazen testimony highlights a widespread lack of legal compliance in the nightlife sector, with his statements suggesting that neither the management nor the individual employees at his clubs were filing appropriate tax returns.
As a direct consequence of the staggering unpaid tax bill and subsequent criminal investigation, the man has since been forced to forfeit his three clubs and his private residence.
The case mirrors a nationwide crackdown on tax evasion within the nightlife sector. Last year, the Tokyo Regional Taxation Bureau uncovered approximately 2 billion yen in hidden income connected to host club operating companies and around 30 hosts in Shinjuku Ward’s Kabukicho district.
