North Korean authorities in South Pyongan Province have recently begun levying fines on small businesses that they claim have not registered with the government, causing deep concern among many small business owners, Daily NK has learned.
The move appears to stem from North Korean leader Kim Jong Un’s instructions at a year-end meeting of the country’s Central Committee of the Workers’ Party of Korea (WPK) to put the economic system “in order.”
“The authorities are investigating individuals who are running unregistered businesses or engaging in business activities unrelated to the industry in which they’re registered,” a South Pyongan Province source told Daily NK on Dec. 8.
“The government believes they have made illicit profits and are levying fines on them,” he added.
CRACKING DOWN ON UNREGISTERED BUSINESS OWNERS
The first offender caught up in the government’s fine collection campaign in the first week of January was reportedly an individual running a delivery business.
“There was a big bust of individuals who were making money by taking tricycles or motorbikes to local train stations and charging people to transport their luggage,” the South Pyongan Province source said. “The authorities have been investigating how much money they made in the past year and then slapping a fine of at least 30% of their profits.”
According to the source, local people’s committees are responsible for the investigation of the small private business owners. Committee officials claim that making profits without working in an institution or organization while failing to pay taxes to the government is a clear violation of the law, according to Daily NK sources in the province.
One local people’s committee in the province reportedly came to the conclusion that private delivery entrepreneurs average a yearly profit of USD 240. The committee subsequently levied fines of USD 70 on unregistered business owners.
NEW FINES CAUSE ANXIETY AMONG BUSINESS OWNERS
Some defectors Daily NK spoke to suggested that North Korean authorities are collecting these fines just to fill the government’s coffers.
“The chief purpose of [Kim Jong Un’s year-end] decree to put the economic work system in order is to ensure people are paying taxes,” a former North Korean government official who defected to South Korea told Daily NK.
“The objective seems to be to increase the government’s funds as well as maintaining control over all economic activity, including small private businesses,” he added.
While Daily NK sources made it clear that North Korean authorities are not aiming to completely eradicate small private businesses, they raised concerns about the negative impact the government’s actions will have on poor business owners, such as those running businesses out of small sheds or even carts.
“The crackdown on private businesses started after the year-end plenary session and has caused considerable anxiety among people running delivery, handicraft and food businesses,” a Daily NK source said.
“People are really concerned about how they will survive if the authorities start restricting people from making money this early in the year,” she added.
*Translated by Violet Kim
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