North Korea has warned businesses in the inter-Korean Kaesong Industrial Complex that they will face hefty fines if caught dodging taxes. The fine would amount to 200 times the tax amount they attempt to evade.
The North Korean state agency overseeing special development zones announced the new tax regulations on Thursday, the Unification Ministry here said. They target errors, omissions or "illegal acts" in accounting records.
Only four out of the 123 South Korean businesses operating in Kaesong have paid taxes of US$153,000 in total this year according to their revenues. "North Korea appears to be suspicious that a large number of the other 199 companies which reported no profits are actually making money," a government source said.