New tax hits already meager earnings of North Korea spring water sellers

As economic crisis grips country, water traders complain of government overreach.
By Hyemin Son
2021.11.17
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New tax hits already meager earnings of North Korea spring water sellers A general view of the Ryongaksan Spring Water Factory in this undated photo released by North Korea's Korean Central News Agency (KCNA) in Pyongyang on September 30, 2016.
Reuters

A new tax on spring water in North Korea is eating into the income of poor people who make their living bottling it for sale to wealthier countrymen, sources in the country told RFA.

Every North Korean is given a government-assigned job but usually must find other ways to supplement their meager pay. For some, this has meant buying goods imported or smuggled from China and selling them at a markup in local marketplaces.

But those types of businesses require money to start with. Water trading is one of the few businesses available to even the poorest and most unskilled of North Koreans. Until now.

“This is the first time that the authorities have imposed a tax on spring water,” a resident of South Pyongan province’s Songchon county, which borders the capital Pyongyang, told RFA’s Korean Service Nov. 7.

“An official of the people’s committee from the Ministry of National Territory Environment Protection is there at the spring to collect the tax in cash directly from the traders when they finish pumping out their water. The tax is 1,000 won (U.S. $0.20) for every 50 liters,” said the source, who requested anonymity to speak freely.

That means that the tax would reduce the revenue from selling a liter bottle for 800 won by 2.5%.

Traders view the tax as another example of their government’s intrusiveness and resent the fact that their small incomes are being further diminished, sources said.

The economic crisis gripping North Korea — due in part to the closure of the border with China and suspension of all trade over the past two years in response to the coronavirus pandemic — pushed more people into the business of water trading in nearby Unsan county, a resident there told RFA.

“The spring water trade can earn cash immediately and doesn’t require any seed money, so it has been a great help to many residents struggling to survive. So, people are angry that the government is taxing the tiny income of the spring water traders,” said the second source, who requested anonymity for security reasons.

The price the traders can get per liter depends on how they sell it. In November, the price was 300 won per liter when sold in large vinyl containers and 800 won per liter when sold in smaller plastic bottles. This was considerably higher than the price of water pre-pandemic, when the plastic bottled water sold for about 700 won.

To make sure that the water sellers pay their taxes, a governmental official arrives at the spring every dawn to monitor withdrawals. Only those who pay in advance are allowed to pump water, the second source said.

“It’s not that the traders won’t pay the tax, but they still complain that they are being taxed even before their first sale of the day.”

Bottled spring water has become somewhat of a status symbol in North Korea, the Seoul-based Korea Bizwire online news service reported in 2018.

The country’s poor water purification infrastructure makes tap water unsafe to drink without boiling it first. Even then, it might be unsafe to drink. Wealthier residents of North Korean cities are the only ones able to afford spring water, the report said.

The South Korea-based NK Daily newspaper reported in 2019 that severe electricity shortages and other factors prevented tap water from reaching many parts of the country. Residents of the city of Pyongsong, bordering Pyongyang, walked or drove to the Taedong River 10 km (6.2 miles) away to get water for use in their homes.

From this spread a grassroots industry of traders bottling and selling Taedong River water to Pyongsong residents. Unlike spring water, river water still required boiling to be drinkable, the report said.

Water is supplied to only 82.1 percent of North Korea because of unreliable electricity, lack of resource management, poor infrastructure, and other factors, the U.N. Population Fund reported in its 2014 Socio Economic Demographic Health Survey.

Statistics from the World Health Organization indicate that only 66% of North Korea’s drinking water in 2020 was classified as “safely managed,” compared to South Korea’s 99%.

Translated by Claire Lee. Written in English by Eugene Whong.

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