Kim Jong-un demands ‘loyalty tax’ from workers to repair North Korea’s finances

Reports are emerging from North Korea that leader Kim Jong-un is imposing a new tax on workers stationed in China in a bid to bolster the hermit kingdom’s ailing economy.

The border between North Korea and China was closed in January – leaving North Korea completely cut off from its main trading partner.

So Pyongyang has issued a demand that North Korean workers based in China pay so called “loyalty funds” to help make up the shortfall.

The North Korean government has ordered each trade worker stationed in China to contribute 12,000 yuan (about £1,400) if they’re single, and 24,000 yuan if they’re married.



Kim Jong-un demands 'loyalty tax' from workers to repair North Korea's finances
There is a possibility the deadline will be extended, since the party congress isn’t until the beginning of next year

Failure to pay the new tax will entail the loss of their work permit and forced to return home to North Korea.

The money won’t be easy to come by: “Due to the shutdown of the border, the trade workers are barely making money right now, so they are having a problem fulfilling the loyalty fund assignment,” an official of a trading company in the Chinese city of Dandong, speaking under conditions of anonymity, told RFA’s Korean Service.

“They have to pay into the loyalty fund by the end of this month, so there is only about a week left,” said the source.



Kim Jong-un demands 'loyalty tax' from workers to repair North Korea's finances
North Koreans working in China have to pay the ‘loyalty’ tax or return home

They added that if workers are unable to pay, their employers will be expected to make a contribution instead.

The source claimed: “This is why the companies are pressuring the workers not to embarrass them. If they are not confident in their ability to pay the fund, the workers are asked to return to North Korea immediately.”

According to Korea News Digest, the 12,000 yuan figure was based on a previous appeal.



Kim Jong-un demands 'loyalty tax' from workers to repair North Korea's finances
The source claims if workers are unable to pay, their employers will be expected to make a contribution instead

Another un-named source explained that a fund-raiser to help pay for repairs after the devastating typhoons in August and September, workers were ordered to donate 2,000 yuan – but many chipped in more.

They added: “During that time, the trade workers were required to give a minimum of 2,000 yuan ($230), but many voluntarily gave the maximum suggested donation of 12,000.”



Kim Jong-un demands 'loyalty tax' from workers to repair North Korea's finances
Many workers that were supposed to have gone home to North Korea remained stranded in China due to the onset of the pandemic

“Because of this, the authorities saw that they had the ability to pay more,” they said, “so for the party congress loyalty fund, they set the minimum at 12,000,”

The workers may have to be repatriated anyway. UN sanctions designed to limit North Korea’s ability to fund its nuclear programme ordered all North Korean workers to return home by the end of 2019, but various obstacles – not least a global pandemic – have prevented that from happening.

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