Last month, North Korea announced its revised rules about taxation on firms in the joint park, which stipulate that those caught for accounting fraud face a fine of up to 200 times the money involved.
"Several representatives visited Kaesong yesterday and conveyed a letter to the North Korean authorities to lay claims that such rules are excessive," the Kaesong park official said. "Most of the companies' chiefs there put signatures on the document," he added.
It marks the first time that the companies in the industrial park have appealed to Pyongyang over the unfairness of the new rules.
In the document, the companies called on the North to introduce a grace period before pushing for such tax regulations, expressing concerns that they could stifle the industrial park, according to the official.
"We also pointed out that the rules run counter to the international taxation criteria as well as its own relevant pieces of legislation," the official said.
According to the law, the firms are also obliged to submit internal documents about transactions and other business on a daily basis, and they will be levied additional taxes in case they submit tax-related documents "deemed unclear."
"The rule means we have to expose our business secrets, which is hard to accept," the official added.
The joint industrial park in the border city of Kaesong opened in 2004 as a symbol of cross-border reconciliation and has been in operation without any major interruptions despite high cross-border tensions between the two Koreas. It was designed to combine cheap North Korean labor with South Korean capital and technology.
As of the end of June, 51,310 North Koreans work at about 123 labor-intensive South Korean plants there, according to government data.
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Kaesong industrial park. (Yonhap file photo) |
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