OSAKA -- A postal savings center in Kyoto has been ordered to pay about 1.1 billion yen in penalties and back taxes for failing to properly tax about 4.3 billion yen in interest on the savings it handles, sources close to the case said Sunday.
According to the sources, the Postal Services Agency's Kyoto Business Center of Postal Savings, which handles savings for the four prefectures of Kyoto, Shiga, Nara and Wakayama, neglected to collect income taxes by illegally applying a tax-exemption system for the elderly to its general depositors.
The Kyoto center handled the interest as if it were covered under a government system that gives tax breaks to disabled people and to those aged 65 and over, according to sources close to the Osaka Regional Taxation Bureau.