N. Korea levies $160,000 in taxes on 8 S. Korean firms in Gaesong complex

North Korea has unilaterally imposed hefty taxes on eight South Korean firms operating in the joint industrial complex in the North's border city of Gaesong, a Seoul government official said Friday.

"Eight out of 123 South Korean companies in the Gaesong complex were slapped with taxes totaling $160,000," the Unification Ministry official said, requesting anonymity.

Of the eight firms, one was levied $87,000 and another was ordered to pay $30,000, the official said, adding another firm has already paid around $20,000 in taxes to the North.

Pyongyang has also demanded 21 South Korean firms in the joint complex submit several documents related to their accounting practices, the official said, a move seen as preparation for further taxation.

Such moves came after Pyongyang unilaterally revised rules in August on operations of South Korean companies in the inter-Korean complex, which call for maximum fines of 200 times any unreported revenues, scrapping a ban on retroactive taxation, and more detailed documentation of purchases of raw materials and accounting practices, among other demands.

As part of efforts to extract taxes, the North is reportedly threatening a ban on the movement of goods and people in and out of the complex if the taxes are not paid, according to other sources here familiar with the issue.

The joint industrial park in the North's Gaesong 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 end-August, a total of 52,881 North Koreans were working for 123 labor-intensive South Korean plants there, according to government data. (Yonhap News)