Business / Corporate

Suzuki 'concealed ¥300 million' in income over two years, tax probe reveals

Kyodo

Suzuki Motor Corp. was found by tax authorities to have concealed around ¥300 million in income over two years through March 2015, sources close to the matter said Tuesday.

The automaker failed to declare ¥1.2 billion partly due to accounting errors and has been levied around ¥450 million in back taxes, including a heavy penalty tax, the sources said, saying the total is an estimate.

“We had miscommunications within our company and also didn’t have enough knowledge about tax affairs,” said a Suzuki Motor official. “Although there was a difference of opinions (with tax authorities), we filed corrected tax reports and paid all of the money levied.”

An investigation by the Nagoya Regional Taxation Bureau found that Suzuki concealed ¥300 million in corporate income by treating old parts for motorbikes used in racing as costs and not inventory, as the automaker pretended to have used the parts, the sources said.

Under the nation’s tax rules, unused parts should be regarded as inventory and cannot be treated as costs unless they are used or disposed of.

The firm had also booked a portion of development costs before the development projects were completed, in clear violation of the taxation rules, they added.

Based in Shizuoka Prefecture, Suzuki sells mainly minivehicles, racking up group sales of around ¥3.1 trillion in the fiscal year to March this year.

The latest development is yet another setback, as Suzuki was hit by a fuel-economy scandal after it was found to have calculated fuel efficiency for some of its cars based on unapproved data methods.

Mitsubishi Motors Corp. was rocked by a similar but more severe scandal, with the transport authorities saying mileage figures for eight of its models were up to 8.8 percent poorer than their catalog data indicated.

Mitsubishi Motors had already incurred a loss in the April to June quarter, as it booked hefty costs to deal with the fuel-economy scandal, logging a group net loss of ¥129.72 billion, compared with a net profit of ¥23.99 billion a year earlier.

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