Japan’s gamblers really don’t like paying taxes on their winnings

Japan’s gamblers are notorious tax scofflaws, according to a new survey by government auditors.

On Wednesday, the Yomiuri Shimbun reported on a recent survey conducted by Japan’s Board of Audit, which discovered that only about 5% of gamblers who’d enjoyed lump-sum payouts of ¥10.5m (US$93k) or higher in 2015 accurately reported their winnings to the tax man and paid the required tax obligation to the government.

The Board cross-referenced a sample of 531 cases involving a combined ¥12.7b in winnings with 18k tax returns to see who declared what. Only 27 cases involving around ¥1.54b were found to have accurately declared their winnings and some of these cases involved amended tax returns, in other words, the individuals had only declared their winnings after tax authorities detected undeclared income.

Gambling winnings up to ¥500k ($4,435) are considered ‘occasional income’ and are exempt from tax, while half of anything over that sum is considered taxable income. There are also concessions made to bettors whose primary income is derived from gambling that allows these individuals to deduct their gambling losses to offset their tax obligations.