Japan Post said Thursday it and its predecessor failed to collect 15.16 billion yen in withholding tax on postal savings interest in the three years through fiscal 2003 by illicitly applying its tax-exempt small savings system for the elderly and disabled to noneligible customers.

Japan Post said there were some 97,700 cases where the tax-exempt system was illicitly applied during the three-year period -- 2,900 cases worth 480 million yen in fiscal 2001, 17,000 cases worth 2.72 billion yen in fiscal 2002 and 77,800 cases worth 11.96 billion yen in fiscal 2003.

The disclosure was made in response to media inquiries after the failure was brought to light by an inspection by tax authorities.

Japan Post has already paid the 15.16 billion yen withholding tax and penalty tax while continuing to collect from the customers involved.

Japan Post, founded last April to take over the governmental Postal Services Agency's mail delivery, postal savings and "kampo" life insurance services, had paid tax arrears worth 7 billion yen after illegal use of the tax-free system was uncovered last summer, aside from the latest revelation.

The public entity attributed the failures mainly to procedural errors, including cases where next of kin failed to submit obituary notices of users of the system after the users' deaths.