Goodwill slapped with ¥1 billion in back taxes

Kyodo News

Tax authorities have ordered Goodwill Group Inc. and several of its subsidiaries to pay back taxes for hiding more than¥1 billion in taxable income in the three years to June 2007, officials at the major staffing firm admitted Tuesday.

The Tokyo Regional Taxation Bureau found in the tax records of Goodwill Group and the subsidiaries that they failed to declare more than ¥3 billion in income, the officials said.

The tax authorities are expected to order the companies to pay more than ¥1 billion in additional taxes, including a punitive surcharge and local taxes, they said.

An official at Goodwill Group’s public relations department said, “Although we disagreed with the tax authorities on some points, we have decided to accept what they told us, because there were some practices that we should amend.”

The tax authorities told Goodwill Group that its accounting practices concerning an acquisition in October 2006 of rival staffing firm Crystal Co. were tantamount to pernicious falsifications of its tax statements, they said. Crystal changed its name to Goodwill Premiere Inc. the following year.

In addition, Comsn Inc., a major provider of nursing-care services for the elderly, and Goodwill Inc., a day labor staffing firm, appear to have failed to declare parts of their taxable incomes due partly to simple accounting mistakes, sources said.

Comsn is expected to terminate its nursing-care-related operations as a result of a Health, Labor and Welfare Ministry decision to revoke its license for the services due to illegal practices it carried out.

Day labor staffing firm Goodwill will disband at the end of July.

Earlier Tuesday, Goodwill Group raised its group net loss estimate to ¥30 billion from an earlier estimate of ¥9 billion for the year ended June 30.