The Tokyo Regional Taxation Bureau filed a criminal accusation Monday against the nationwide union of local government employees and former union executives for allegedly evading about 200 million yen in taxes, sources close to the tax authorities said.
The bureau filed the accusation with the Tokyo District Public Prosecutor's Office against Jichiro -- the All Japan Prefectural and Municipal Workers' Union -- its former chairman, Morishige Goto, 67, and several others, the sources said.
It was not immediately known how many former executives are involved in the criminal accusation.
The tax bureau believes Jichiro, the nation's largest labor union, hid about 600 million yen in taxable income in the two years up to March 1998, they said.
Prosecutors are expected to indict the union and the officials soon on charges of violating the Corporation Tax Law.
Goto and the others have owned up to the charges to prosecutors and officials of the Tokyo tax bureau, the investigative sources said.
The 600 million yen in concealed funds is believed to have been set aside through off-the-book money management.
Jichiro submitted revised tax declarations to the Tokyo tax authorities on Monday and paid an additional 323 million yen in taxes, including about 181 million yen in corporate tax, officials of the union said.
The revised tax declarations for fiscal 1996 and 1997 show revenue of 485 million yen, they said.
This is smaller than the 600 million yen allegedly concealed because the union submitted another revised tax declaration earlier this year, the sources said.
A penalty tax is expected to be imposed on the union later this year.
Jichiro represents 1 million local government employees, making it the largest labor union in Japan.
Between 1994 and 2000, according to an in-house investigation, 11.3 billion yen was paid out in commission fees from related insurance agents to the union's business unit headquarters.
In 1997 and 1998, the union received commissions totaling 3.38 billion yen, of which 600 million yen was set aside and not accounted for, according to the sources.
The Japanese Trade Union Confederation (Rengo), an umbrella organization of labor unions, instructed its member unions, including Jichiro, to declare their taxable income appropriately after a 1997 revision to a tax law made it mandatory for labor unions and nonprofit organizations to submit income and expenditure statements to tax authorities.
However, Jichiro failed to declare any income to the tax authority until 1999.
Goto, who chaired Jichiro from 1992 through 1998, is known to have a great deal of clout and is also well-connected politically.
On Nov. 9, Tokyo prosecutors indicted three former officials of UBC Corp., a Jichiro affiliate that handles data-processing services for the union, and three of their business associates on charges of embezzling about 42 million yen from the company.
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