Kawasaki Heavy Hit with 1 B. Yen in Back Taxes over MSDF Scandal
Osaka, April 8 (Jiji Press)--Japan's Kawasaki Heavy Industries Ltd. was slapped with about 1 billion yen in additional taxes after the defense contractor was found to have wined and dined Maritime Self-Defense Force personnel, sources said Tuesday.
The Osaka Regional Taxation Bureau found 1.3 billion yen in unreported income over the six years through the fiscal year to March 2023, as Kawasaki Heavy pooled funds through fictitious transactions related to repair contracts for MSDF submarines, according to the sources.
Combined with undeclared revenue from a U.S. subsidiary, the company failed to report some 4 billion yen in taxable income.
According to Kawasaki Heavy and the Defense Ministry, the company's repair division at its Kobe plant in western Japan created slush funds by making bogus orders to subcontractors for materials when it was repairing MSDF submarines.
The division used the funds to wine and dine submarine crew members and give them gift certificates and daily goods. The practice is believed to have begun about 40 years ago.
(2025/04/08-15:27)
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