Abolition of Hosts’ Sales-on-Credit System Spurs Rapid Increase in Streetwalkers

Last year, the prostitution of young women to attend host clubs in Kabukicho, Shinjuku, Tokyo, the largest downtown area in Japan, became a major social issue. The managers of the host clubs that were the target of the accusations held a press conference last December and stated that they would “phase out the accounts receivable (tsuke) payment system by April ’24.

The prostitution of young women who go to host clubs has been discussed in the Diet, and the Metropolitan Police Department launched an investigation on charges of violation of the Anti-Prostitution Law (waiting for customers). Many of them answered that their motive was “to earn money for entertainment to go to host clubs. The number of arrests increased sharply by 2.7 times compared to the one-year period in 2010.

By the beginning of ’24, the number of standing women had plummeted as a result of these busts and on-site investigations. However, despite the abolition of the accounts receivable, since April 2012, the number of women in and around Okubo Park in Kabukicho has increased sharply again.

A senior police official said, “There are always 40 to 50 women waiting for customers. This is the same or even more than the situation from last summer to the end of the year,” a senior police official noted. He then explained the background behind the situation as follows: “Accounts receivable payments have been abolished.

Since accounts receivable payments were abolished, many stores are now settling accounts in cash on the spot. In other words, you can’t enter a store unless you have cash on you. For this reason, the hostesses ask the female customers to come to the club after borrowing money from a consumer loan or after preparing money through prostitution, and the female customers seem to do as they are told.

In short, until now they have been prostituting themselves to pay the accounts receivable they were owed after playing at host clubs, but since April they have been prostituting themselves in advance for entertainment at host clubs, and “the order has just been reversed. In the first place, the abolition of bill payment was also questioned as to how far it could be trusted, but it seems that the situation has been reversed” (aforementioned senior police official). In some cases, women who have exceeded their borrowing limits at consumer finance companies are forced into high-interest black-market loans.

Since the fall of 2011, the Metropolitan Police Department had been steering toward mandatory investigations of malicious hosts. In November of the same year, a host club manager was arrested on suspicion of violating the Entertainment Establishments Control Law (providing alcoholic beverages to persons under 20 years of age) for providing underage high school girls with alcoholic beverages. The manager had offered prostitution to high school girls, and the high school girls obtained approximately 2 million yen from about 50 people to be used as accounts receivable.

In January of this year, a host was arrested on extortion charges for forcing a female customer (22) into prostitution by threatening to “watch to see if you are standing properly” and using the global positioning system (GPS) function of her smartphone to track her movements.

Despite the string of arrests, a senior law enforcement official revealed, “In most cases, arrests under the Anti-Prostitution Law and the Entertainment Establishments Control Law result in a release within a few days and no prosecution. He emphasizes that investigations are being conducted from a different perspective in order to make sure that the offenders pay for their crimes.

He emphasizes that investigations are being conducted from a different perspective in order to make them pay for their crimes. “Malicious hosts need to be exposed in cases where the penalties are more severe. In Kabukicho, there are posters and billboards advertising popular hosts as ‘100 million yen achievers. They probably don’t pay taxes. If they are caught in some kind of case, we will seize documents related to the money in a raid, look for evidence that they are cheating on taxes, and report it to the taxation authorities. If we find tamari, the tax authorities will take action. I think we are at the stage of considering this kind of investigation method.”

The “tamari” in this police official’s statement refers to funds that are concealed without reporting taxes. If the funds are concealed without paying income tax, additional taxes will be levied by the national tax authorities. If the concealed deception is expensive and the modus operandi is malicious, it will be investigated as tax evasion and prosecuted by the public prosecutor’s office, and in many cases, it will become a criminal case. A senior official of the National Tax Administration said of tax reporting by the police,

If the amount of money extracted is 100 million yen or more and the taxpayer does not declare it, he or she will be subject to the Maru-inspection (an inspection department with the right to compulsory investigation). Some hosts advertise themselves as 100 million yen players. Some of them have taken appropriate tax measures, while others have not filed any tax returns at all. It’s just a question of where the tamaris are. It’s just a matter of where the tamaris are and whether you can find them.

He also expressed his view that “the only thing that matters is where the tamari is, and whether we can find it.

The penalty for violating the Income Tax Law is “imprisonment for not more than 10 years or a fine of not more than 10 million yen, or both. Will the law be able to crack down on the malicious hosts who prey on women? The battle will likely continue.