North Korean authorities have drastically hiked market taxes in several regions, driving merchants away from official markets and toward underground commerce.
According to a Daily NK source in North Hwanghae province, merchants with fixed stalls in Sariwon now pay up to 60,000 North Korean won ($66) daily in market taxes since mid-last year, while unofficial “grasshopper merchants” must pay at least 6,000 won.
The 60,000 won tax represents a staggering 30-fold increase from the previous maximum of 5,000 won. As a result, market merchants say they’ve become “more afraid to come to the market to make ends meet.”
The burden has intensified during rice planting season, when market hours are shortened for full-scale agricultural mobilization but taxes remain unchanged.
The problem extends beyond Sariwon. In Sinuiju, North Pyongan province, daily market taxes doubled from 3,000 to 6,000 won, with high-earning merchants paying 10,000 to 20,000 won daily.
Revenue push for party congress
The tax increases appear tied to North Korea’s drive to boost non-tax revenue ahead of next year’s Ninth Party Congress. Authorities are trying to absorb cash circulating among the public to fund major strategic projects.
“The state’s hiking of market taxes must be to gather money ahead of next year’s party congress,” a North Hwanghae source explained. “Whether it’s construction, military, or science projects, they all need money to show they’ve accomplished something, so they’re meeting some of their needs with money people make from commerce.”
The massive spike may reflect authorities’ belief that higher market demand justifies increased taxes, particularly after last year’s substantial salary increases. However, these wage hikes largely haven’t materialized.
“They must have raised market taxes thinking that business must be good since the state increased wages considerably,” the source said. “But in Sariwon and elsewhere, many people still haven’t received the promised salary increases, and merchants complain that all that’s happened is they pay more taxes.”
Arbitrary and vague standards
Merchants also criticize the unclear tax structure. “They used to pay 10 to 12% of earnings in principle, but now the authorities seem to randomly demand large payments,” the source noted.
Rather than openly resist, increasing numbers of merchants are abandoning official markets entirely. They’re turning to unofficial channels—operating home shops, taking phone orders, or delivering goods by bicycle—to avoid market taxes altogether.
“More and more merchants ask cart drivers to deliver items or sell goods directly from their homes to avoid paying market taxes,” the source said. “The belief is spreading that it’s simply a loss to show up at the market.”
