Japan's LDP under pressure over scandal

The Japanese government is facing intense pressure over fears of corruption and financial misconduct as a civil group of Japanese citizens called on it to target lawmakers of the ruling Liberal Democratic Party over a slush fund scandal.

All contributions received from political parties for policy activities — as well as donations received from individuals, support groups and other political organizations for political activities — should be classified as "business income" and subject to taxation, according to a statement by the Alliance to STOP the Impermissible Acts of Slush Fund and Tax Evasion by the LDP.

It said it is waiting for a response from the National Tax Agency after submitting a petition to the agency on Thursday.

Many LDP lawmakers are accused of tax evasion connected to political fundraising events, while there are also allegations that several LDP factions redirected funds from ticket sales back to some of their lawmakers and stored them in illegal slush funds.

With no record of the payments in the financial statements of the factions or their members, the lawmakers would have evaded income tax on the funds.

Takakage Fujita, president of the alliance, said the slush fund practice is a clear violation of the Political Funds Control Act, and the submission of the petition is an action taken in response to the anger of the Japanese people.

"It's shameful to make false financial reporting, taking advantage of the lack of penalties for lawmakers," Fujita said.

The alliance called on citizens nationwide to join a criminal complaint filed last month with the Tokyo District Public Prosecutors Office against 10 LDP lawmakers.

Revenue underreported

According to an earlier report by Kyodo News, the LDP's internal investigation showed that the ruling party's largest faction is believed to have underreported revenue from its fundraising events to reimburse its members for more than a decade.

The recipients used the funds for social gatherings, personnel expenses, vehicle purchases and other purposes, the report said.

Naohiko Hasegawa, one of the lawyers representing the complainants, urged the tax authorities to thoroughly investigate the case and handle the situation properly.

"If the money the lawmakers received was originally considered to be political funds, it should be used for politics," Hasegawa said.

Shigeaki Koga, a policy analyst and a former official at Japan's Ministry of Economy, Trade and Industry, said the issue remains shrouded in mystery.

"Over a considerable period, and with a large number of lawmakers involved in similar schemes, they've received undisclosed funds… The public is very angry about this," Koga said.

Additionally, the deadline for tax filing is approaching. Ordinary citizens and small business owners are facing strict taxation, having to keep meticulous records and file taxes down to the last yen, while the actual rules of operation for politicians are very lenient. The stark contrast has multiplied the public anger, Koga added.

"The slush fund scandal has a very significant impact. It's not just about the LDP losing trust; it's about the trust in party politics and the entire parliamentary system in Japan being shaken," said Akira Yamada, a professor of the School of Arts and Letters at Meiji University in Tokyo.