As an expert in international economics and political systems, I can provide some insights into the fiscal structure of North Korea, a country that is often shrouded in mystery due to its isolationist policies and limited information flow to the outside world. It's important to approach this topic with a critical eye, as the information available is subject to various interpretations and may not always reflect the current reality on the ground. Step 1: English Answer When discussing the tax system in North Korea, it's crucial to understand the context of the country's political and economic framework. North Korea, officially known as the Democratic People's Republic of Korea (DPRK), operates under a centrally planned economy, which is characterized by state control over production, distribution, and investment. Official Narrative vs. Reality: The official narrative from North Korea suggests that there are no taxes. This is often highlighted on April 1st, which is celebrated as "Tax Abolition Day" in the country. According to North Korean propaganda, the country is the only one in the world without a tax system, positioning it as a utopian society where citizens do not have to bear the burden of taxation. Historical Context: It is true that direct taxes, such as income tax, were officially abolished in North Korea in 1974. This move was presented as a step towards a more egalitarian society, ridding the nation of what was described as "remnants of an antiquated society." However, the absence of direct taxation does not necessarily mean there is no fiscal revenue collection or that citizens are free from financial obligations to the state. Indirect Taxes and State Control: While there may not be a formal income tax, North Korea does have other means of generating revenue. Indirect taxes, such as value-added tax (VAT) and other consumption taxes, are likely levied on goods and services. Additionally, the state controls all major industries and can set prices for goods, effectively capturing a significant portion of the economic surplus. Informal Economy and Black Market: Due to the strict control and scarcity of goods, an informal economy has developed in North Korea. This includes a black market where goods are traded outside of state control. It's unclear how taxes are applied, if at all, in these transactions, but the state likely has mechanisms to control and tax the informal economy to some extent. **International Trade and Financial Transactions:** North Korea engages in international trade, and while it may not have domestic taxes, it is subject to international trade tariffs and taxes when dealing with other countries. Additionally, any financial transactions that North Korea conducts on the global stage are subject to the tax laws and regulations of the countries involved. Citizens' Obligations: Even without direct taxes, North Korean citizens have various obligations to the state. This includes mandatory contributions to state-run programs and the requirement to work in state-assigned jobs. The state also controls the distribution of rations and other necessities, which can be seen as a form of indirect taxation where citizens are obligated to fulfill certain roles in return for state-provided support. Conclusion: In conclusion, while North Korea officially claims to be a tax-free country, this does not mean that there is no system in place for generating revenue or that citizens are exempt from contributing to the state's coffers. The lack of transparency and the secretive nature of the North Korean government make it difficult to ascertain the full extent of their fiscal policies. However, it is clear that the state has alternative methods of revenue collection and that the absence of direct taxes does not equate to an absence of financial obligations for citizens. Step 2: Divider read more >>

Officially, there are no taxes in North Korea. The date of 1 April is the North Korean "Tax Abolition Day". North Korean propaganda claims that North Korea is the world's only tax-free country. ... Direct taxes, such as income tax, were officially eliminated in 1974 as "remnants of an antiquated society".read more >>