Japan will consider stricter penalties on gold smugglers as attempts to smuggle gold into Japan have been soaring with offenders trying to sell bullion in Japan and earn an 8 percent sales tax from the transaction, government officials said Tuesday.
The number of gold smuggling cases uncovered by Japan’s customs authorities hit a record 467 in the year through June, involving around 870 million yen ($7.6 million) in tax avoidance, also the largest on record, according to the latest government data.
Japan has seen a growing number of gold smuggling cases, especially since consumption tax was raised to 8 percent from 5 percent in 2014.
By secretly bringing gold into Japan, perpetrators evade paying the 8 percent tax. They then attempt to sell it at shops with the buyer paying for the gold and the 8 percent levy, making the taxation a “profit” for the smugglers.
Under a set of envisaged steps unveiled Tuesday, the Finance Ministry is considering imposing higher fines on gold smugglers and plans to step up customs inspections with the use of gate-like metal detectors and X-ray detectors nationwide.
Currently, Japan imposes a fine of up to 10 million yen on gold smugglers who fail to pay the sales tax and raising the maximum amount is one of the options.
Gold prices have hit high levels in recent years and gold bars are seen as relatively easy to hide, carry and sell at shops.
In most of the cases handled by customs authorities in the year thorough June, the smuggling was done by air travelers from South Korea, Hong Kong and Taiwan. Last December, three women flying from South Korea to Japan were caught trying to smuggle gold bars weighing 30 kilograms by hiding them in underwear.
“We believe what we’ve seen is the tip of the iceberg,” a ministry official said.