Japan Firms Put Record Sum on Expense Accounts

Japanese firms spent a record 4.55 trillion yen, or $32 billion, on entertainment and gifts in 1988, more than the government plans to spend on defense next year, the National Tax Administration Agency said today.

Total expense account spending rose 8.7% from the previous high of 4.19 trillion yen, or $29 billion, in 1987, an agency official said, speaking on condition of anonymity.

He said the agency estimated total expense account spending based on a survey of 57,599 of Japan’s 1,851,653 companies that closed their annual accounts in January, 1989.

The survey showed average expense account spending of 3 cents for every $7 in company income, the official said.

Japanese executives are often given carte blanche to entertain at exclusive nightclubs and Japanese-style inns. Inviting clients for golf and presenting gifts are other customary entertainment expenses.