◆ State Takes 5–8% Commission on Sales — Something Like a Value-Added Tax?
What, then, becomes of individuals who have been making their living from clothing production?
"The instruction is to register with the 'clothing processing household unit' under the commercial management office, or with clothing-related service facilities, produce goods through those channels, and sell at the 'state unified price' — the state-set price. In state-run shops, the structure requires paying the state a commission of 5–8% or more of sales revenue, so clothing processing will likely work the same way."
※ Household unit (gaenaeban): A small-scale production organization run mainly by women.
This commission may effectively function as a tax on the sale of goods and services — something akin to a value-added tax.
The Kim Jong-un regime has placed the entire chain from production to transport to sales under state control, fundamentally restructuring the distribution system. Private economic activity continues to shrink, and the real incomes of urban residents have fallen steadily, with a marked decline in purchasing power. Multiple reporting partners indicate that goods are not selling well even in state-run shops, and that the financial situation of production factories is also deteriorating. It remains to be seen how the regime's policy of controlling distribution will develop going forward.
We have not received information indicating that crackdowns on private clothing producers are being intensified in areas outside the north of the country.
※ ASIAPRESS communicates with its reporting partners through Chinese cell phones smuggled into North Korea.
