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Japan’s Kajima Corp. Accused of Dodging Taxes over Algerian Road Project

Monday, October 17, 2011

Tokyo- (PanOrient News) Tokyo tax authorities have found Kajima Corp. hid about 400 million yen (about 5.2 million dollars) in taxable income for three years through March 2010 in connection with an expressway construction project in Algeria, Japanese media reported.

Kajima paid the 400 million yen to the broker in a third country in connection with the project, for which 540 billion yen was awarded to a consortium including Kajima in September 2006, but the Tokyo Regional Taxation Bureau concluded that the money should have been booked as entertainment expenses that cannot be declared as losses, according to the case.

The tax bureau found Kajima failed to declare about 1.9 billion yen (about 5.2 million dollars) in taxable income overall for the three-year period.

A five-company consortium, led by Kajima, won a contract in September 2006 to build a section of about 400 kilometers for some 540 billion yen under the expressway project.

The section was scheduled to be completed in February last year. But construction work has been delayed due to bad ground conditions and the poor security situation, leaving construction costs expanding beyond initial plans. Kajima was forced to book losses related to the project in the year ended last March because the Algerian government has refused to pay part of the 540 billion yen, citing a delay in the highway construction.

The fees paid to the broker may have been intended to promote talks between Kajima and the Algerian government as the consortium has been pressing the country to extend the work period and pay overdue bills, according to the reports.

PanOrient News



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