Taxation
•
by Bundesbank
Some of you might have noticed, that the congress is discussing the current taxation system in our Forum. To those who haven’t or are not registered (which I highly recommend) I would like to inform about the position of the Ministry of Finance on this.
Raw Materials:
For ages the Union has rather high import taxes on grain, although they are not as high as in many other countries which try to protect their market from foreign imports. Import tax on grain is at 30 % right now, and so far it is not likely that this going to change.
Oil and Dimonds are a different story. As the Union has no regions producing these raw materials, the economy is dependent on foreign imports of those raw materials and therefor has low import taxes on it. I believe that Congress agrees on the fact, that we need to avoid citizens wasting money on ivestments in those industries in Germany and ensure foreign supply of those goods. However, the govermnet would like to modify taxation and level import taxes between 4 % and 10 %. So far it looks like taxation will be rather at 4 % than at 10 %.
Iron is and has been a problem. The union has regions of medium iron but there are only 5 iron copanies and only one of them seems to be producing right now. The total number of employees working or “sleeping” in this sector is below 20. This means that the Unions weapon industry is dependent on foreign supply as well. The proposed increase of income tax regarding the iron industry will not have big effects on the countries income. By saying weapon industry is dependent on foreign Iron, this means that the government will keep import taxes on iron on a low level as well.
The situation on wood is simular to the situation on iron. Germany has medium wood regions and although there are only 5 wood companies in the Union more of them seem to be producing, compared to the iron sector. However, there is not much wood offered on the market and the wood offered is of foreign origin. Keeping this in mind, the governemnt will not ask congress to increase import taxes on wood until there is more competition on the market.
Finished goods
While there is an ongoing dicussion about raw material taxes in congress I also asked the congress to start one about the taxation of finished goods.
The current system was implemnted, when we faced RWs all over the place and when we were in desperate need for goods on the market, as we had 2000 people to take care of. Today the demand on goods decreased and the number citizens came down to the normal level again (about 1350 people). That is why I believe a re-view of the current taxation system on finished goods might be needed.
Regarding the fact that any good can be produced anywhere, there is no real reason why we should have import taxes of 1% on goods of this sector. The minium import tax on finished goods should at least be equal to the import tax on raw materials that are needed to produce those goods. It doesn’t make sense having an import tax of 10% on Diamonds but having a import tax on gifts of 1% only. No foreign investor would start a gift company in the Union, when he/she would have to pay 10% import tax on the raw material, while he/she would have to pay just 1 % in case goods are produces anywhere else and are just exported to Union.
To encourage foreign investors and Unions investors to build companies in the Union and rather export from the Union than import to it, the import tax on finished goods should be higher than the import tax on raw materials. Import taxes on grain and food are a good example of it. While we have an import tax of 30 % on grain, we have an import tax of 40 % on food.
Import Tax on finished good = Impor tax on raw materials + x % (e.g. 10😵
Based on this the impor taxes on finished goods could look like this:
Foo😛
40% (30%+10😵
Gifts: 20% (10% +10😵
Weapons: 11% (1% + 10😵
Moving Tickets: 14% (4% +10😵
As mentioned, the discussion regarding taxation of finished goods just started in congress and no decission has been made on this yet.
Links to congress:
Raw materials: http://egermany.itg-em.de//viewtopic.php?f=41&t=420
Finished goods: http://egermany.itg-em.de//viewtopic.php?f=41&t=444
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Comments
Nice article 🙂
and I agree on both points!
Make sure you have an oversight about the taxes the country receives so that we can also adapt the income and vat taxes on finished goods, as we have had one of the highest taxes in those areas for over 3 month now.
What about VAT and Income Tax? Will have a look at the articles.
YEAH. I HAD a Q2 Iron company producing nicely. BUT when I asked all the party leaders and the President to raise the import tax so that I could compete with outside companies like from Romania, Brazil, and Spain, I was told to,
"F**k off. We shouldn't create our iron when we can import it cheaper."
I responded with the logic that we, eGermany need to get in on this market and PAY our DOMESTIC or eGerman worker's wages instead of FOREIGN workers. Again I was told to,
"F**k off."
I also no longer buy gold packs as I'm real life tightening my financial belt. So, not having anymore funds to limp my business along, I released my workers, (who I paid extremely well, and had gotten up to a 3 in resource skill), downgraded my company to a Q1 and continue to produce with only myself employed at 1 DEM per day, and produce 5 Q1 iron.
in an enemy land...
"Just by destroying Stark Enterprises
we could cripple their national defense.
So you, Professor Vanko,
the world's greatest expert on electricity,
must devise the destruction of Starks' mighty guardian
Iron Man!"
Regarding Oil, if the DEM keeps going down the road in face of the gold, and if you really make the adjustment to the import tax, German market will become less and less attractive to foreign companies.