Market fees are levied on merchants for the use of market stalls in North Korea. Sources report that these fees have been raised at Pyongsong’s Okjon Market, which is located in South Pyongan Province and one of North Korea’s largest wholesale markets. In short, merchants at the market are suffering due to low consumer spending, but the authorities have nevertheless raised taxes on their business activities.
Merchants are complaining that they are suffering from both a poor business environment due to North Korea’s wider economic stagnation and an increase in market fees.
“Market fees have been increased across the board,” said a South Pyongan Province-based source. “Fees levied on merchants who use market stalls selling grains, meat, clothes and shoes have doubled.”
North Korean market management offices have traditionally demanded that merchants pay 1,000 to 2,000 KPW in fees per day.
“There’s been a significant decrease in the number of merchants at the market, she said, “But they haven’t given up on their businesses. It’s just that their goods aren’t selling so they can’t afford the market fees.”
The North Korean authorities may have increased the market fees to cover losses following the reduction in the number of market merchants.
Roadside merchants, however, are still paying relatively small fees for the authorities to turn a blind eye to their business activities, which are technically illegal. The authorities generally demand that roadside merchants pay 50-70% of what normal merchants pay.
“The authorities are supposed to crack down on roadside selling, but market management offices generally just leave them be if they pay the fees,” the source said. “The roadside merchants are forced to close, however, if there’s a special event or if the local people’s committee requests a crackdown.”
The North Korean authorities have also doubled the fees they collect from distributors of goods.
Daily NK recently reported that the tax offices affiliated with local people’s committees in some areas of South Pyongan Province have increased the fees by double or even more.
There has been a marked decrease in customers looking for manufactured goods at Okjon Market, which indicates that the consumer market is stagnating. International sanctions appear to be impacting the level of consumer spending in the country.
“The overall atmosphere at Okjon Market lacks vigor. There’s a lot fewer people visiting the market this year than last year,” a separate source in South Pyongan Province added. “Stores selling manufactured goods have very few customers. People are just buying necessities like clothes, food, grains, shoes and cosmetics.”
The Korea Institute for National Unification (KINU) published a report entitled “North Korea’s National Market Information” in 2016 that suggested stalls selling manufactured products comprise 29.4% of Okjon Market’s area.
“Merchants at the market are gloomy because most customers just buy one or two kilos of corn with the money they earned the same day,” the source continued, adding that “the most popular item nowadays is corn noodles.”
She further reported, however, that while Okjon Market is facing a downturn in sales, this has not lead to stagnation in the market. “Trading companies transport their goods to the market by vehicle, so the prices are cheaper than other areas. So people from far and wide come here to shop,” she concluded.