NAGOYA – Toyota Motor Corp. failed to report as income about 40 million yen in gifts received from guests at inaugural parties in 1999, sources said Wednesday.
The gifts were to the company’s newly appointed chairman and president.
The figure is part of approximately 1 billion yen the Nagoya Regional Taxation Bureau found the company failed to declare as income over a three-year period through March 2000, the sources said.
The situation is expected to reflect badly on Toyota Chairman Hiroshi Okuda, who is promoting compliance with laws and provisions in his capacity as chairman of the Japan Business Federation (Nippon Keidanren).
Toyota held parties at hotels in Tokyo and Nagoya in July 1999 to celebrate the accession of Okuda to chairman of the major automaker and Fujio Cho replacing him as president.
A total of about 2,600 politicians, bureaucrats and business leaders attended the events and brought congratulatory gifts, but the company did not report some of them, including cash contributions and works of art, as income, they said.
The sources said earlier the tax bureau also found that Toyota had bought parts from affiliate Toyoda Boshoku Corp. at a higher price than usual, and determined the act was a taxable donation instead of nontaxable operating costs as declared by the automaker.
The bureau instructed Toyota to pay 400 million yen in penalty and additional taxes for the two cases, the sources said, adding that the carmaker has already paid the full amount.
A Toyota spokesman said the firm, through consultations with tax authorities, decided to report the gifts as “miscellaneous income.”
He denied that the firm had any intention to use the gifts for the private purposes of its executives.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.