Qat sellers bribe gov’t workers to avoid taxes [Archives:2007/1098/Reportage]
Qat sellers say they pay money to tax collectors in order to pay partial taxes for selling qat. Qat taxes are 10 percent, with the tax authority collecting approximately YR 2 to 3 billion annually, according to Tax Authority officials.
“Many tricks are used to evade taxes. For example, instead of paying the taxes leveled upon us, we pay the tax collector some money. At other times, we offer him a bag of qat to satisfy him so he'll reduce the amount of taxes we must pay the authorities,” explains 25-year-old Ashraf Wajeeh Al-Deen, a qat seller at Al-Qadisiah market in Sana'a.
“Another trick is to hide most of the bags and display only a few for inspection, which helps us pay less,” he added.
Salim Al-Sawadi, another qat seller from Sana'a, says, “Most of the time, if the tax is YR 4,000, tax collectors take YR 2,000 – YR 1,000 for themselves and the other for the authority.”
Taxes are collected in two ways: at qat markets and at checkpoints through which qat sellers bring qat into the city.
Three tax authority officials, each with their own tasks, are sent to qat sellers to collect taxes: a tax collector, a supervisor and an expert whose job is to determine qat quality. The tax collector obtains the money, the supervisor watches over the process to see if it goes right and finally, estimating the qat is the most important part, due to which tax is imposed,” tax collector Ruzaiq Quraish explains.
Tax collectors then give qat sellers a treasury bond or bill for this process in order to make them pay the tax.
The difference between qat tax collectors and security officials is that tax collectors are sent to qat markets to collect money from qat sellers whereas security officials supervise the tax collectors to ensure that everything is going properly or not and are responsible for giving directions to the qat tax collectors. Tax collectors hand over collected funds to their officials, who then send it to the Finance Ministry, according to tax authority officials.
Taxes are collected from qat sellers according to how much qat they have and its quality. Taxes start from a minimum YR 550 to a maximum of YR 6,000; however, in some exceptions, taxes are more for a few large qat sellers who sell hundreds of bags of qat, tax authority officials note.
“Qat sellers sometimes give us the cold shoulder and won't pay because they say we take money from them; however, we're so kind and understanding with them. If anyone from our team takes money for himself, he'll be punished and charged,” Quraish warns.
He adds, “No qat tax collector has been caught stealing money on the job because nearly all are doing it; everyone is taking a share. The share differs from one tax collector to another depending upon how much he gains from qat sellers every day and what kind of qat sellers he's dealing with – large or normal ones, That's why it's hard to say how they share the profits.”
Former tax collector turned qat seller Mohammed Al-Jaradi explains, “Money is collected daily, but sometimes when qat sellers are gone or unavailable, the tax collector must try again the next day to obtain the unpaid taxes, which should go to the Ministry of Labor.”
He continues, “Usually, no officials care about the government; all they care about is their pockets and how much they can gain from qat sellers. For sure, this is better for us too, because we pay less.
Regarding why he became a qat seller, Al-Jaradi says, “Seeing the fantastic profits qat sellers make, I decided to become one of them because there's liberation; anyone can escape from taxes. I'm now making more money than I used to and I'm happy about that.”
Qat sellers cheat customers
Al-Deen admits, “We use many different tricks on customers to make them buy our qat and not go to other qat sellers. Moreover, it depends on their knowledge of qat quality, but in the end, we win and they always end up paying the price we've targeted them to pay.”
He adds, “People end up buying because most qat sellers deal alike and almost all of us agree to keep the same price. There are exceptions for some regular customers who always deal with us and have special pricing.
“Sometimes, particularly in the winter when qat is rarer, we increase prices, often doubling them. For example, if a bag of qat ordinarily is YR 700, we'll increase it to YR 1,200 or 1,400 because customers don't have any other choice but to pay it,” Al-Deen explains.
Additionally, “Whenever only one bag of qat remains, we just hide the old qat to be sold the next day, mixing it with three to five other bags in order to camouflage it to the customer. This trick works perfectly most of the time because very few people are experts in qat and know whether the qat is good or not.
However, he notes, “Famous qat sellers never do this because they care about their reputation. For that reason, they just sell their reserve and sometimes take a loss.”
According to Al-Jaradi, the main factors determining the price of qat are reputation and location, appearance (the brighter the better) and the season of the year.
“In order to gain customers' trust, we swear by God's name more than 10 times. For sure, most of the time we're dishonest in our swearing, but it's a valid and influential means of increasing the price.”
However, Al-Sawadi, who sells qat in Al-Madinah market, notes, “Qat sellers never incur a loss because most Yemenis chew qat.”
Al-Deen further explains, “Knowing the customer at first sight is our secret. By focusing on his teeth, cheeks and the way he looks at the qat, you can discover his level of knowledge. Some of our customers are very clever and don't get deceived, while some are irksome because they keep trying to get discounts.
“The best customers are emigrants because they really will pay anything without asking for discounts, so we take our shot by increasing the price as much as we can,” he admits.
A profitable business
“In our business, we make only profit. A small qat seller clears at least YR 4,000 to 7,000 in profits, after expenses, while some make between YR 25,000 and YR 30,000 a day. It depends on the qat offered and its quality. YR 400 to 600 is the least profit for each bag of qat and sometimes more,” Al-Sawadi explains.
“Qat sellers and qat farmers are the best traders in Yemen because both profit. Qat farmers make profits from qat sellers and qat sellers from customers. Of course, most of the time, qat sellers profit more because they manage the market and can increase prices when necessary. However, qat farmers profit more in some cases; for example, when qat isn't found or in the winter, when qat isn't as available as in the summertime.”
“Despite summer stagnation, we profit because qat is much cheaper. Qat is expensive in winter, so we increase the price,” Al-Sawadi notes.
Qat ins and outs
Distinguished by the need to get the product to market as fresh as possible – as it takes five to 14 hours from field to customer – qat usually is marketed in the nearest towns and cities, such as Hamdan, Arhab, Bani Hashish, Shasan, Sanhan, Khawlan, Rada, Al-Hatha, Al-Beidha, Damt and many other places that are qat sources.
Qat markets are practically everywhere in Sana'a, which has some famous and highly populated qat markets, including: Shumaila, Ans, Al-Balili, Al-Rihab, Darsil, Al-Madinah, Al-Qadisiah, Al-Hasabah, Hadda, Hajar, Al-Da'iri, Hayel, Nuqum, Beit Baws, Al-Maqaleh and Al-Sawad.
From best to least, the various qat types are: Al-Shami, Al-Geifi, Al-Thola, Al-Omari, Al-Aansi, Al-Ahjari, Al-Shasani, Al-Arhabi, Al-Khawlani, Al-Hamdani, Al-Hatha, Al-Gaili, Al-Matari, Al-Amari, Al-Dhale', Al-Aqari and lastly, Al-Sowti.
According to Al-Deen, “Prices differ according to the quantity or the season; for example, a bag of Al-Geifi usually costs YR 3,500, while Al-Sowti can be found for YR 300. Al-Shami is considered the most expensive, costing YR 8,000 or sometimes more.”
Obviously, the best qat costs more than the regular. Also, the taste of the qat will determine whether it's good or bad quality.
Qat sellers very often market qat, as there are various venues for selling it. Often with their own transportation, sellers bring qat from farms in their cars or sometimes hire others' cars for this purpose.
Additionally, large qat sellers will purchase a plot of qat farmland that will be under the seller's control, who brings laborers to harvest it and then sells it directly to consumers. Customers also may buy their qat directly from farmers, especially if they are near urban concentrations.
Due to the market's unassailability, qat sellers avoid losses by buying and selling small quantities, but regardless, qat sellers know how to regulate their business activity based on how many customers they have each day.