Yet another automotive company that thought it could get away with something

In case you haven’t noticed, automakers are running rampant with deception. Of course, there’s the whole Volkswagen situation, and then Mitsubishi came under fire for its fuel economy scandal. Now, yet another automaker has been caught with their pants down, only this time, it doesn’t involve emissions or fuel economy. This time, we’re talking about Suzuki’s inability to follow Japanese tax laws and illegally concealing ¥300 million or about $2.92 million in income over the last two years through March of 2015.

According to the Japan Times, the Nagoya Regional Taxation Bureau found that the company had been treating old parts for motorcycles as actual costs instead of inventory, ultimately pretending to have used the parts while hanging on to them the entire time. The problem is that, under the Japan’s current tax rules, all unused parts must be treated as inventory unless they are used, or disposed of, at which point they can be scratched off as cost.

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

In addition to this disregard to the nation’s tax laws, the company was also found to have not declared ¥1.2 billion because of accounting errors as well as booking a portion of development costs prior to the projects actually being completed – yet another clear violation of tax regulations. All of this comes not long after Suzuki, like Mitsubishi, was found to have fudged its fuel efficiency numbers on some vehicles too. According to an “unnamed source that is close to the matter,” the company has paid ¥450 million or nearly $4.3 million in back taxes and fines so far.

Why it Matters

I find something hilarious about this whole story. The fact that Suzuki’s official said that there was a “difference of opinion” with tax officials over what constitutes inventory and costs. That’s not a difference in opinion; that’s a blatant disregard for the tax law. Suzuki didn’t use the parts, kept them in inventory, and marked them off as cost. That’s like reporting a loss that never happened. At the end of the day, I think automakers hard being held under a microscope more than ever. Sure, you can blame Volkswagen for that, but at this point, it’s not a good idea to cook your books, overstate any fuel economy or emissions figures, or anything else that you know is illegal. Put simply; you’re not going to get away with it.

Source: Japan Times

Robert Moore
Editor-in-Chief and Automotive Expert -
Robert has been an auto enthusiast his entire life. He started working cars at a young age, learning the basics from his father in the home garage on the weekends. As time went on, Robert became more and more interested in cars and convinced his father to teach him how to drive when he was just 13 years old. Robert continued working on cars in his free time and learned as much as he could about engines, transmissions, and car electrical systems, something that only fed his curiosity more and eventually led him to earn a bachelors degree in automotive technology with a primary focus on engine performance and transmission rebuilding.  Read More
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Photo Credit: Suzuki

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