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December 21, 2016
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June 16, 2008
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January 21, 1955
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Approved For Release 2008/06/16: CIA-RDP80-0081 OA005800120007-1 CENTRAL INTELLIGENCE AGENCY INFORMATION REPORT CCIQ'I11111111UTIAL Ills Doatment oontains information affecting the Na- tMsal Ds(sase of the United States, within the mean- US of Title 19, Sections 791 and 794, of the U.S. Code, as smsaSst, no trunse"Won or revelation of its contents W or reedpt by an unauthorlasd person Is prohibited by law. The reproduction of this form Is prohibited. DATE DISTR. 21 January 1955 25X1 NO. OF PAGES I. RlQ(1EMENT NO. RD TIN ioURc'! IVMMATIONN NCI MW MM AN NPINIT n. TIN AN A*M OP CO~ 0$ TOIITANIM. (FOR ON W ANMI) 1. In North Korea a statement of the village tax quotas to be collected from indivi- duals is sent from the central gowwomient to the province, from there to the 25X1 county and on to the village. The village attempts to usess each individual a sufficient amount so that the total collected in the village will equal the government quota. If the amount collected in the village does not most the quota because of decreased crop yields or improper assessments, the matter is referred to the county and province authorities who then assign teams to investigate the situation. Invariably, the village leaderr are told to collect enough to equal the government quota. Tx defaulters are listed by name on a bulletin board in each market. Several people are selected from among the local businessmen to urge each merchant to pay his full taxes. If they are successful in seeing that the taxes are paid, the county People's Committee chairman sends them a letter of appreciation. If unregistered merchants are discovered conducting business, the Finance Section of the county People's Committee imposes taxes on the amoamt of goods in the possession of the mer- chants. Taxes on merchants are usuaall.y heavier than those imposed on farmers even though his food consumption allUNanoe and sate other expenses are deducted from his total sales figures in calculating his local self-government tax. 2. Farmers pay 27 percent of their rice crop and generally 23 percent of their other crops as taxes-in-kind. Their 6 percent irrigation tax is also paid with grain. No taxes-in-kind are paid for the first three years on newly exploited land as it is usually burned off and tilled for three years under government supervision. In the fourth year, ten percent of each crop is levied as.taxes- in-kind. If a farmer fails to pay the full anaunt of his tax-in-kind by a specified date, a fine of five percent per month of the full amount of the tax is levied, so that if he awed 200 kilo~rar of potatoes and paid only 150 kilograms on the due date, his debt would be 60 kilograms the following month since five percent of the 200 kilograms is added to the unpaid 50 kilograms. The village People's Committee appoints an inspection committee to make a preliminary inspection of the taxes-in-kind paid by each farmer before the COI0 lllIA'TIAL STATE ARMY ? NAVY Y AIR , I POO I AEC 25X1 n Approved For Release 2008/06/16: CIA-RDP80-0081 OA005800120007-1 Approved For Release 2008/06/16: CIA-RDP80-0081 OA005800120007-1 CONFIINTIAL _ 2 - grain is sent to the county People's Committee, where it is again inspected by permanent inspection teams and then stored in the county warehouse. 3. Monetary taxes paid by farmers ineludb the local self-government Tax which is imposed upon each family at t W t'*te of i to I percefl t 'bf the total yearly income, and paid quarterly. The x'atd fifes it readjustmehts have to be made to meet government quotas :. A Vehio al`Ta*, cff too-hmdred 4bn Is paid yearly for each cart, whetber clerk Ok -horse . '.#inis ~rnon"-pent of the Local Self-government and the Vehio Partes ttistt 'to one` pet+leth11 a day af the unpaid amount. Both these taxes are collected by the village People's Committee and sent by bank channels to tbb cl ty lE a Cod mittee . The ?tea' , Union Fee is levied at the rate of ?t&ree 'VO!t monthly tiara i aisle member Or' a family. The Korean-Soviet Association Feeeithfd to ' ftrfbt bns e`t portars Asso- ciation Fee are both levied at':*he rate t r twO'wo!t' for each male member of a family. The liatic l Detente- dltpp tare A$rsocia'~io>!r 'tie is levied aty the rate of t1ree to five won monthly =Tbt ~I+aeh~ a ?a~ar 'of `latter 4. In calculating ? the taxes+in i fttid' and thee- se gOtii Geht tax for the average farmer, crops-are divided Late twohc$tef lea` 1or'cro such Cs rice, millet, and barnyard millet, and minor erbpi; iiiii'iis 3tatbes r"6 at s anti other vegetables. Although taxes -inokind are let ie con a11' elh , iii : farmer may' ply his major crop taxes-in-kind vitk only oai'4W ithO treef'typos ~ 'min if he desires, as the tax rate of 27 paroat t$etke leis t6r.r41 thMi . 'He``ma ? do the dame with his, minor crops, but,Wy,4iot euhetK*te -a loi`'er ?o `4_m , or crop. 5. In calculating the selfag evainsit ~dl~'!oF?ii a tt"famt3.y=o~' ' s peopYe, consideration is given *ta-6Zdh 0ele a$A16t& ski Of cfepi -hatwstedj .. taxes?iaaeind ? in k1l.ogro f' 'YiA e~tlt o'. Wtieh includes items such as food ;aotl-d'~ he31' , ohsred ilaer 1l a seed alletiranae ads #h t$ kit se' f ObA' ~'of i i d rf a !odder allowance; a food so beet allowance of 600 grams (300 in major crops and 300 in minor) daily for each maziber of a family. 6. A balanced imo 2 Olt' oft SW 'id kflb i s is ?i `ed'by 'Odgaftd'g from the total crop harvested, the lOk@9-ia-ki5md#~ ` iri expftses, +KO seed allowance, the fodder allowance, and the food consun allowance. Based on official wok; 3KIps rates, A U bit "044 b' incomes is then con- verted into a won figure. In August 1954 the official prices used for the conversion were,= Irox3~Lt > 'Tor and kf b sm of rice, 40 for millet, 20 for potatoes, 30 ki beans 'lad-3a"3 4bther vegetables. In order to calculate the farmer's quarterly income for self-government tax purposes, the fodder allowance and the food co} a~1,w"cca Ida also converted into a won equivalent. In August the pt'fce..'e valents for these two allowances as set by the government were ,,-.ps4or a kilogram.of rice, 9 for millet, 10 for potatoes, 8 for beans, and'5 for other vegetables. The farmer's adjusted quarterly income is then computelby totalling the $1tL.equivalents of the balanced crop income and of the i fdtider and food allbicegr.. he farmer may then be assessed 2.2 percent ot`'h s,quarterly inccmta f, r the local self-government tax. (See attachment for chart shoving how a five-Member farm family which had harvested 5,310 kilograms would be assessed). 7. The farmer usually tries, to subtract all his allowances from his major crop yield since the tax rate on major crops is higher than on minor crops. He thus lessens his self-government tax considerably. This is allowed by the village People's Committee and the tax assessors, provided the total of the taxes from the village equal the government quota. If the village taxes fall short, the Committee readjusts the farmer's deductions and thus increases the self-government tax to equal the quota. Approved For Release 2008/06/16: CIA-RDP80-0081 OA005800120007-1 Approved For Release 2008/06/16: CIA-RDP80-0081 OA005800120007-1 CONFIDENTIAL 8. For tax purposes,, the tax inspectors and crop estimators mu1*p4- y the average yield of the previous year by the amount of planted land in p'yon'g in the present year in order to estimate the total year's harvest for assessment purposes. In the case used in the attac?hed table, the farmer who planted rice on 3,000 p'yorig of land averaged in the previous year one kilogram of rice per p'yong, yard 500 grams of millet, 400 grams of barnyar"d?millet, 5 kilograms of .potatoes, 300 grams of beans, and 6 kilograms of vegetables. .Merchants,, such as peddlers and shopkeepers, pay a commercialitax levied on their profits Profit is regarded as two, to three percent of,monthly sales. The tax is figured quarterly. Each merchant must keep dailyaccount books which are and&ited~quarterly by the Finance Section of the co, ty People's Committee. Tex adjustment on a quarterly basis is accomplisahed by the Finance Section at the same time. The merchant pays his commercial tax each month for an earlier monthh, i.e. in April he pays the tax for January, in May he pays February's tax. He also pays a local self-government. tax which Includes land, education, and bbui&lding taxes.. A merchant who retails 30, 0001 won worth of goods in a month would pay about '3,11.00 won as his commercial tax and about 1, 000 won as self -;government tax. A saalar`ie d. employee of a government organization is d'asess.ed a, certain amount of his salary as the self-government tax and in addi=tion pays one percent of his salary for sociallirnts~urance and general"ly one, percent- of his salary monthly for each asjsociation or group to which he belongs. He pays three percent of his salary month to the local branch-, of the Labor Party as his ,b`abor ;Party fee. If a farms has living with him a son who is a~salaried employee, ee~ch must pay his self government tax independently. With regard to the une_yyloyed and to free laborers, since each member of a family ?presumably cos sumes 00 grams of food dai regardless of income., a percentage is levied upon the total food consutgr of the family for the s?olf-gove nt tax. 1. The allowance is based on a rate of 17 kilograms for 1, ;11M p"y? gn obi rice paddy and 13 kilograms for 1,000 p'yorig of minor ,.C_ o ,. One p'yong is equal to 3.95 square yards. 2. L-Clonment'i By "balanced amount" of crop income, probably means s net `tgklance" of crop income . CONFIDENTIAL Approved For Release 2008/06/16: CIA-RDP80-0081 OA005800120007-1 , Approved For Release 2008/06/16: CIA-RDP80-0081 OA005800120007-1 Self-Government Tax for Farm Family of Five People Rice Millet Millet Potatoes Bean Vegetables Total Total crop harvest 3,000 250 400 1,000 60 600 5,310 Kg in kilograms (Kg) a. Taxes-in-kind 990 56 92 230 14 138 1,520 Kg b. Farm expense allowance 51 39 90 Kg c. Seed allowance 90 1 5 100 14 2 212 Kg d. Remainder, after subtracting a, b, and c from total harvest 1,869 193 303 1 631 32 460 3,488 Kg e. Fodder allowance 33 27 6o Kg f. Food allowance 540 193 347 1,080 Kg g. Official price for a and f 5,940 1,746 3,740 11,426 won h. Balanced crop income (d minus a and f) 1,296 303 257 32 460 2048 Kg i. Official price for balanced income 71,280 9,090 5,140 960 4,60o 91,070 won J. Total yearly income (g end 3) 102,496 won k. Quarterly income 25,624 won 1. Quarterly self- government tax 563.73 won Approved For Release 2008/06/16: CIA-RDP80-0081 OA005800120007-1