Japan Tax Agency Chief Steps Down over Moritomo Issue

March 10, 2018

Tokyo- National Tax Agency Commissioner Nobuhisa Sagawa, who was involved in the issue of a controversial discount state land sale to private school operator Moritomo Gakuen when he was a senior Ministry of Finance official, stepped down from the top post at the agency on Friday.

The Japanese government decided to accept his resignation at a cabinet meeting on the same day.

With Sagawa's resignation, the administration of Prime Minister Shinzo Abe aims to put an end to the land sale issue although confusion is growing over allegations that the ministry had made changes in documents related to the sale of the land plot in the city of Toyonaka, Osaka Prefecture, to Moritomo Gakuen, based in the city of Osaka, the capital of the western Japan prefecture.

The Constitutional Democratic Party of Japan and five other opposition parties demanded a sworn testimony by Sagawa at the Diet, Japan's parliament, over the suspected document alterations.

Sagawa offered to resign as head of the tax agency, noting that he disrupted deliberations at the Diet due to a lack of sincerity in his parliamentary remarks, received various criticisms over the management of administrative documents, and was serving as director-general of the MOF's Financial Bureau when the documents in question were submitted to the Diet, Minister of Finance Taro Aso told a press conference on Friday night.

"We have to admit that" Sagawa's behavior undermined the trust of the public, Aso said.

On whether he himself will resign, Aso said, "Now is not the time to think about such a thing."

Aso also said that the ministry will release the results of its investigation of the allegedly altered documents early next week.

Sagawa told reporters that he feels great responsibility for the allegation.

The ministry will have Takeshi Fujii, deputy head of the tax agency, serve as acting commissioner for the time being, without naming a successor to Sagawa.

The land tract in question was sold to Moritomo Gakuen in June 2016 at 134 million yen after as much as 800 million yen in what the ministry claimed as the cost for removing waste from the site was deducted from its appraisal value.

Sagawa joined the MOF in 1982. He became National Tax Agency commissioner in July 2017 after serving as director-general of the MOF Financial Bureau from June 2016.

When he was chief of the bureau, Sagawa said at a parliamentary meeting that the land sale with the huge discount was appropriate. Sagawa also said that records on negotiations with Moritomo Gakuen had been already discarded.

But the Board of Audit of Japan pointed to a lack of convincing grounds for the large discount.

Sagawa had not held a press conference since he became chief of the tax agency.

Abe repeatedly defended the appointment of Sagawa as commissioner of the agency, saying that he put the right person in the right place. As Sagawa resigned less than a year after taking office, however, the prime minister is likely to be harshly criticized for appointing him to the post.

Tetsuro Fukuyama, secretary-general of the CDPJ, said, "Suspicious about document alterations deepened further."

The opposition camp is set to continue pressing the government over the document issue, planning to urge the MOF to submit original documents using the Diet's investigative authority. Jiji Press