Kyrgyzstan and Uzbekistan recently introduced new requirements for merchants at bazaars. They now must use cash registers if they want to continue doing business. The authorities in both countries have good reasons for imposing this new rule. But the bazaars in Central Asia are an ancient tradition, and vendors are not happy with the new regulation.
Prague, 3 October 2003 (RFE/RL) -- There is a problem with cash registers in Central Asia.
The authorities in both countries have started imposing a new regulation on 1 October requiring merchants to have cash registers. Vendors at bazaars in Kyrgyzstan and Uzbekistan were not pleased.
The new regulation led to protests in the Uzbek cities of Tashkent, Samarkand, and Termez today, and reportedly to a clash between police and merchants in the city of Urgench.
Kyrgyzstan's Deputy Finance Minister Askarbek Shadiev explains the reasoning behind the new regulation.
"There are stalls [in the bazaar] that make about 300,000 soms [per month] [about $7,000], but these stalls pay monthly taxes of [only] between 1,300 to 2,500 soms [$30 to $60]. In my opinion, this is not much. Today, small and medium-sized businesses account for between 40 to 45 percent of [Kyrgyzstan's gross domestic product]. However, they pay taxes amounting to 1.3 percent of what they take in," Shadiev says.
Kyrgyz Finance Minister Bolot Abildayev said yesterday that the government usually receives 3 million soms ($70,000) in taxes each year from the Dordoi bazaar, but says when the authorities conducted checks of payments at that bazaar, they collected 8 million soms ($188,000). Abildayev said the introduction of cash registers for keeping track of purchases could raise that figure to 80 million soms annually ($1.9 million).
The Kyrgyz government's press service released a statement on 1 October defending the new measure. Citing Prime Minister Nikolai Tanayev, the statement said every consumer has the right to a receipt as proof of purchase so that if a product proves to be of poor quality it can be easily returned.
The statement further said that "the merchants are making a problem" because they do not want to pay taxes. "The general introduction of cash registers," it said, "will only help the economy get out of the shadows."
Some 10,000 vendors from Bishkek markets and bazaars did not agree, and they staged a three-day strike in late September. One merchant from Bishkek's Bereket bazaar explained why she participated in the strike.
"Today, I did not go to work because we are against the introduction of cash registers. We pay tariffs to bring things across the border and taxes and rent for the stalls at the bazaar, and for electricity and the service that cleans the bazaar, so it is useless to continue selling," she said.
The fine for not using a cash register is some 50,000 soms -- the equivalent of 100 monthly minimum-wage salaries in Kyrgyzstan.
In Uzbekistan, the cash register regulation affects only those selling non-food items. As of this week, all non-food items are to be sold only in stores, not at bazaars.
Bazaars in Uzbekistan -- as in all Central Asian countries -- sell a variety of goods. Besides fruits, vegetables, spices, meat, and cooked food, it is also possible to buy clothing, car parts, household utensils and dozens of other products.
Uzbek authorities are more interested in what the vendors are earning and not claiming in their taxes. Uzbekistan is attempting to make its currency convertible, but the process has taken longer than expected and does not appear to be coming to fruition soon. The "shadow economy" of black market money-changers and unreported sales rivals the legitimate economy.
But many merchants at Uzbekistan's bazaars do not earn much, which is why vendors from Tashkent's biggest bazaar -- the Chorsu bazaar -- held a protest today against the regulation.
As one woman put it, "They are treating us like sheep. The people are like a sea wave -- you can't just ignore the people. What right do they have to take our goods away and beat the traders? What kind of law is it? Why can't we have a normal, quiet life?"
It is the same in the western Uzbek region of Khwarezm. Once the center of a mighty Central Asian empire, the ancient capital of Khiva now sits near an ecological disaster area caused by the drying up of the Aral Sea. Life for merchants in the bazaars has not been good. This week, one female merchant there asked a question that Uzbek authorities have not yet addressed.
"These food and non-food rules in markets are confusing. Where are we supposed to buy these cash registers?"
Cash registers will not be easy to buy for most Uzbek merchants. The average monthly salary is somewhere between $10 and $20, depending on the region. One female vendor said she can barely earn enough for food for her family.
"All that I earn is not enough to buy bread. My daughter is supposed to go to fifth grade, but I have her selling sunflower seeds so we can make money. She wants to study, of course, but she hasn't anything to wear to school -- no shoes, no clothes. Come to my house and see. I do not even have anything stored for the winter," she said.
The authorities in Kyrgyzstan and Uzbekistan are correct. Many merchants are avoiding paying their full taxes. But bazaars are an ancient tradition in Central Asia. They are a place where people buy what they need, often from people they know. They are social places where people meet and gossip and play cards and backgammon.
The authorities could be treading on fragile ground, as some merchants believe this is a case of squeezing the already poor simply to fill state coffers.
(Amirbek Usmanov and Oktambek Karimov of RFE/RL's Kyrgyz and Uzbek services contributed to this report.)