Commercial registry turns additional burden on sellers in Syria
Enab Baladi – Hussam al-Mahmoud
A few weeks ago, the issue of the commercial registry in the areas controlled by the regime constituted an inconvenience factor for sellers after the Ministry of Internal Trade and Consumer Protection granted all of them a deadline to obtain a trade registration.
The ministry approved a deadline starting until mid-January before extending it until the end of next February and obliging all sellers of various titles and degrees to review the commercial register secretariats in their governorates during the specified period.
After a wave of reactions that did not welcome the decision on the ministry’s Facebook page, ranging from complaining to talking about closing shops and considering the decision a “gate to theft,” with doubts about its applicability to those close to the authority, the government’s justification was scanty through the local newspaper, al-Watan, on 28 December, when one of the directors (unnamed) in the Ministry of Internal Trade explained to the newspaper, that the circular “is a contribution to organizing the activities of the “shadow economy” that are currently widespread.
The director pointed out that government subsidies will be lifted from major wholesalers after obtaining the commercial registration, given that the merchant may be of the second, third, or first degree if he is an importer.
And the ministry had denied, in the text of the deadline it granted to sellers in late 2022, the exclusion of all those with a commercial register from government support.
The ministry clarified that merchants of the fourth degree and below classification will remain in the subsidy system, just as the owners of small shops or retailers and semi-wholesalers cannot obtain a commercial register of more than the fourth degree, which means that they will remain within the support system.
In addition, the obligation to obtain a commercial register helps to know who the legal sellers are and allows shops to benefit from services, such as obtaining an industrial gas cylinder, if the establishment is a popular restaurant, for example, according to what al-Watan reported.
Bill is big
Criticism of the government action was not limited to the opinions of those affected only and extended to workers in the relevant government sectors.
On 17 January, a member of the Board of Directors of the Damascus Chamber of Commerce, Mohammad al-Hallaq, explained that the total costs that must be paid by owners of commercial activities to obtain a commercial registration of the fourth-degree range between 800 thousand and one million Syrian pounds (1 USD = 6670 SYP) according to the “S-P Today” website.
The seller must pay 85,000 pounds to the Chamber of Commerce, and 150,000 pounds to the Commercial Registry Secretariat, in addition to other payments for social insurance, salary, wages tax, and transportation costs, which also take several days to obtain the register.
The Chamber of Commerce also requires the seller to pay 50,000 pounds annually to subscribe to the chamber, in addition to an annual affiliation fee of 35,000 pounds as well.
The Ministry of Interior Trade indicated earlier that each of the chambers of commerce charges a different fee for the commercial register of the fourth degree, explaining that it will oblige all chambers to charge a minimum fee.
The seller under pressure
Hisham, a 31-year-old clothing salesman in the central city of Hama, has been working in the profession for five years, but during that time, he did not obtain the commercial registration due to the costs involved in this step.
The seller explained to Enab Baladi that the issuance of the commercial registry may deprive him of subsidies, which also means additional suffering in securing basic needs due to the sharp rise in prices.
Payments and obligations incurred by the commercial store do not stop at the commercial record, as there are also almost daily Supply Directorate patrols, and many violations are imposed upon each visit, even if the seller follows the rules, instructions, and regulations, as there are loopholes that the directorate exploits, such as searching for the origin of the goods and their conformity with the specifications, and the absence of a regular invoice book, and the prices that are originally subject to the variable exchange rate, according to Hisham.
These factors put the seller in front of two possibilities, either paying a violation of no less than 120,000 pounds or paying a bribe to avoid the violation, the value of which is not less than 50,000 pounds.
As for Hisham, the cost of the commercial registry, which can reach one million Syrian pounds, is exhausting, as fourth-class sellers are forced to pay such an amount at a time when the value of the goods in their shops may not exceed one or two million Syrian pounds sometimes.
Shop owners are forced to provide their shops with electricity through private electricity generators known as “ampere subscriptions.” Hisham pays 150,000 Syrian pounds per week in exchange for supplying his shop with 2.5 amperes of electricity to compensate for the absence of regular electricity, which barely comes for an hour or two a day, with more than 20 hours of electrical rationing.
In addition, the malfunctions of the electrical network, which turned into an intended work, forces the seller to bribe the electricians in exchange for repairs and obtaining a little electricity that is not enough to charge mobile phones and batteries, and this means another 50,000 Syrian pounds that are deducted from the profits on an almost daily basis, according to Hisham.
The salesman prefers to stay in his shop without a commercial registry, indicating that he may close his shop when necessary to avoid the costs of the commercial registry, which will be in addition to workers’ wages, social security fees, and the taxes that must be paid annually to the treasury a burden that the seller cannot be borne, and this is if the seller originally owned the store and was not bound by a monthly rent as well.
On 28 December 2022, al-Watan newspaper quoted an unnamed director at the Ministry of Internal Trade as saying that the commercial registry does not require fourth-class sellers to register their workers with social security.
Economic point of view
Professor of Banking and Financial Sciences, Firas Shaabo, explained to Enab Baladi that the Syrian regime has been restoring for years to secure any financial resources through traditional and non-traditional means, despite its claim of organizing and structuring the Syrian economy, which suggests to the world that it is trying to improve the economic situation in the market, but the goal ranges between collecting fees and taxes.
The seller’s obtaining a commercial registry means that he has become exposed to taxation under a certain classification and degree that subject him to different criteria, with the aim of replenishing the state treasury with some amounts and opening the door for the beneficiaries and the powerful to collect additional funds through manipulation and bribes.
The Syrian regime may link it in the future to import and export, and what the seller is entitled to or not, according to his degree, in addition to potential strict conditions that may push the merchant to scramble to obtain a commercial registry, according to Dr. Shaabo.
The researcher also pointed out the tendency of some sellers to cancel the commercial register in order to maintain the subsidy after the regime’s decisions related to excluding specific categories of citizens and removing them from the subsidy system.
The regime does not think with the mentality of the state and institutions but with mafias, militias, and a regime based on individuals. The state’s resources are very few today, but the pillars of the regime have enormous resources, including drugs, weapons, illegal businesses, and oil.
Firas Shaabo – Professor of Banking and Financial Sciences
Considering that the Syrian regime believes that it is not required to secure electricity and water and improve the economic situation due to the excuse of sanctions and the blockade, it is required to secure salaries and pensions in any possible way to prove its existence, regardless of the exchange rate of the local currency against the dollar, the value of the pension and its purchasing power, which means that the regime’s payments are not affected at the exchange rate.
Internal criticism, Trade Ministry responds
On 23 January, al-Watan newspaper published a report in which workers in public institutions and sectors criticized the decision to compel the commercial registry.
Safwan al-Qurabi, a Member of the People’s Assembly, considered the decision a new addition to the random, unconsidered decisions because its timing is not appropriate according to the current circumstances, according to his opinion.
The head of the Federation of Chambers of Commerce, Abu al-Huda al-Lahham, stated that the decision imposes burdens on small commercial activities that many cannot bear, stressing the need to cancel it.
For his part, Hussein Ali al-Freij, director of the Social Insurance Branch in Damascus, considered the decision a factor in increasing work pressure on the branch since the beginning of the year due to the increase in the number of transaction holders in light of the lack of continuous electricity during official working hours, as power availability is limited to the period between 9 am and 1 pm.
In the face of these criticisms, the ministry replied that it did not issue the decision since what it stated was stipulated in the Consumer Protection Law originally, explaining that the different issue is to grant a grace period to violators only and to oblige chambers of commerce to charge low fees from fourth-class sellers, to “protect citizens from paying legal violations.”
The decree was issued on 12 April 2021 with 83 articles.
Article “38” thereof stipulates, in its clause “A,” that a penalty of a financial fine ranging between 200,000 and 400,000 Syrian pounds be imposed on the wholesale, semi-wholesale, or retail seller who violates the decisions or instructions issued by the Ministry or the concerned authorities related to obtaining the commercial, tourist, industrial, health or vocational register, or the number of any of these registers or the name of the product was not mentioned on the declaration card, or it violated the decisions and instructions regulating professions, according to the text of the decree published at the time by the Syrian News Agency (SANA).
Unbearable living conditions
The deteriorating economic and living conditions reflect a different form of life in Syria, during which queues and overcrowding have maintained a frequent presence as a result of crises and problems that are not addressed from their roots as much as they are being pushed forward, especially with regard to electricity and fuel, high prices, depreciation of wages and the value of the local currency against the US dollar.
According to a joint UN report issued in June 2022, these factors have kept Syria as one of the “hunger hotspots” due to “severe food insecurity.”
In addition, the living crises, including the issue of electric rationing, which provides electricity for an hour or two in some areas, and the severe fuel shortage, imposed on citizens another form of reality whose shortcomings cannot be repaired with a monthly pension that does not exceed for a large number of employees, including the military personnel, 20 or 30 US dollars.
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