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INCREASE IN IMPORT TAXES

Day 2,075, 11:30 Published in Pakistan Argentina by Heart Stealer

Before moving forward let me clear this for those who dont know what are import taxes. Import Tax is a tax set forth by the Country administration that decrease the earning cutting out the tax from the price of items at the marketplace when citizen selling the item doesn't have a citizenship of the country. Tax revenue is added to the country's account.
Example: If a citizen with Spanish citizenship decides to sell one unit of Food at the marketplace in France for $1.00, and France's import tax for food is 50%, and France's VAT is 5%, then the earning for the seller will be only $0.45 (1.00 - 55%). So the import tax is now a real loss for the seller, and not anymore just an obstacle for the price competitivity. This new way of taxation makes the export activity almost always less profitable than placing offers on the local market.
Tax rates can be viewed by clicking on the Economy tab on Country stats.



Unlike real life, free trade does not work in eRep.

Let me first run through how import tax and free trade works in eRep and then show the difference as to why this rl ideal is not applicable to eRep economy.

Countries that have low import tax made a mistake of assuming high prices of products in their country is damaging to their economy as consumers faces higher prices of goods without competition from abroad.

The most important thing though is not to judge the absolute level of prices and make assumptions as to what is consider too high or too low a price. The most important thing here is to figure out how import tax affects the general wealth of the economy.

The difference in eRep economy and real life economy is that in eRep:
1. All industries are in a perfectly competitive model. Company owners do not have market power due to no barriers to entry. Consequently most company owners make slim profit margins because if there were any excessive profits new companies would come into the market.

2. All industries are the same in every country. Unlike real life, where there are some products.. say Manga films can only be made in Japan, in eRep all manufacturing industries can be supplied by the home market.

So what is the difference in terms of import tax to the wealth of a country?

Because of reason one, company owners never make more than the total wage bill of the workers. In fact, most company owners should make very slim profit... The amount should be equivalent to how much the general player find worth the time and effort to run a company.

So,
Company owner profit < Wages of workers

To see how wealth is affected by import tax - follow the money.

With import tax set at 99%, goods sold translate to mainly higher wages of workers and some to home company owners.

Without import tax, prices translate to mainly higher wages for foreign workers and some to foreign company owners.

Without import tax, wealth is transferred out of the economy to foreign companies. As workers are the main beneficiary of goods sold, even if the foreign company owners are home based citizens, wealth is transferred from home citizens to foreign citizens.

With import tax set at 99%, majority of wealth stays in the economy in terms of higher wages by home citizens/workers and if most of the owners are foreign based, it is still beneficial to close off the market since company owners profit < total wage bill of workers.

The key here is to realize that the consumers are also the workers. Any 'high' prices will translate back to the consumers in terms of higher wages and company owner’s margins should stay the same.

There should be no reason why foreign company owners can run a company more efficiently than a company run in home country. Since all industries are the same in eRep and across countries there are absolutely no benefits to free trade.

In RL free trade works because some companies can be more efficiently run in other countries or goods that are exclusively produced by foreign companies can be enjoyed by home consumers.

Case for Low Import Tax

The only reason to have low import tax is if the country is so small certain goods are not produce as the economy cannot support the industry. In this case, it is more preferable for government to either run state own companies to supply the market or to run schemes to purchase these goods to sell for their citizen rather than lower import taxes.

Import Tax on Population

Another reason as to why import tax should be raised to 99% on all manufacturing goods is because of how it affects population.. One of the key to the health of a nation.

Without import tax, prices of goods are depressed and put downward pressure on wages. Wages is one of the main factors that will affect population flows within eRep. When import tax is lowered wealth is transferred out of the economy and it will translate to higher wages for foreign workers and lower wages for home workers. This will damage the home country in terms of greater outflow of workers due to lower wages at home and higher wages abroad.

For the reason of population flow and transferred of wealth, import tax on industries on manufacturing and land companies that the country have a high region in should all be set at 99%.

That is why I am proposing a law to increase import taxes to 99% on weapons.





 

Comments

TheJakal
TheJakal Day 2,075, 12:01

voted, you will have my vote.

Heart Stealer
Heart Stealer Day 2,075, 12:21

Thank You Asif Bhai

NiederHaven
NiederHaven Day 2,075, 12:24

Voted! You'll have my vote too...

Heart Stealer
Heart Stealer Day 2,076, 01:59

Thank You!

Uzair J
Uzair J Day 2,075, 14:17

didn't read the whole thing.. this business kind of essays always bore me.. a short summary would be appreciated.. voted anyway..

Heart Stealer
Heart Stealer Day 2,075, 22:47

Here it is peoples from other big markets like serbia argentia etc sell their weapons in our market at high prices earn big profits and pay no taxes to Pakistan , after this law when it will be approved they will have to pay 99% taxes on their sales. When they sell in our markets our local producers highly get affected by this and its obvious we cant compete with bigger economies and free trade affects our country in two ways first local producers cant sell at good prices and second country gets nothing when they sell in our market.

Uzair J Day 2,076, 08:08

Comment deleted

Faris Khawaja
Faris Khawaja Day 2,075, 15:13

voted

vrsoldiers
vrsoldiers Day 2,075, 23:12

my vote fer yew!!!

Heart Stealer
Heart Stealer Day 2,076, 01:58

Thank You!!

ComKar
ComKar Day 2,075, 23:15

voted

dodial
dodial Day 2,076, 03:38

You have made a very detailed analysis but, I am afraid you are utterly wrong about your conclusions. You have missed several important facts and made several incorrect assumptions.
1. A 99% import tax is not a tax - it is in affect an import blockade. No producer will sell to a country with 99% import duty. If they would, a Q7 weapon would be priced at 20+ cc. No one would buy it. Hence a blockade rather than a tax.

2. Industries across countries are NOT equal. Countries with bigger bonus produce more weapons and hence can run more efficient industries. Further more countries with RM available at better price produce produce even more efficiently.

3. Import tax DOES NOT mean higher wages for foreign workers. What a silly conclusion. Any countries wages are determined by the amount of bonus they have and the ratio of factories to available workers. Weapon prices are globally determined by high bonus countries. You fail to understand that all markets are driven by buyers. In eRep buyers are not limited to their country of CS, they can buy from anywhere at anytime. More so because of iTrade.

4. Because iTrade facilitates tax free transactions any country with excessive tax will loose out on buyers.

5. Countries that attract buyers have 1% VAT. We already have 2% which is higher. Plus we have 1% import duty which means the products coming in from out have to account for 3% additional if they have to sell in our market. This essentially already is putting us 2% higher than China. Prime reason for higher prices and the absence of buyers.

6. By putting up 99% import duty you will destroy our market once again. We only recently put it down to 1% and what you need to do is advertise ePak as a selling market of choice to producers and traders and to buyers. You effectively burning down the market just like Asif did a few months ago. It takes months to restore the market after all sellers and buyers have walked away.

Heart Stealer
Heart Stealer Day 2,076, 05:33

What do u mean by "WE" those WE that passed the law and then u said thanks guys here its ur payment for doin my dirty work, am off to China After all i have to make huge money without paying a single penny to my country coz I dont give a damn about Pakistan i give shit about my ownself coz i wanna see millions in my personal account hahaha before blaming TheJakal keep that in mind he never tried those cheap dirty tricks to get to the top. At least respect others and stop being Abuzar (R.I.P) lol stop being a jerk i was waiting for the cat to come out and it came after all

dodial
dodial Day 2,076, 03:40

Donot be a moron like Asif and insist on incorrect conclusions without proof. What you have in your article is all talk in the air. You have very little understanding of market dynamics in eRep. Provide me with exact calculations on HOW produce would be sold at WHAT price to further the taxes in ePak.

Heart Stealer
Heart Stealer Day 2,076, 05:27

Who the hell are you?? Why would any one provide any calculations to a chinese?? Your shop is gonna close baby

Heart Stealer Day 2,076, 05:21

Comment deleted

dodial
dodial Day 2,076, 17:54

you are beyond repair. the tongue of your master hangs through your mouth. Your are foolish if not naive to think I make any extra money by selling on ePak market. The net value I get by selling in ePak market is less than what I get by selling in eChina in a fraction of the time.
"you shop is gonna close" -- just shows the level of intelligence you have. both your comments are rogue, rude, unintelligent and irrelevant. You either do not have a mind of your own Or are controlled by someone else.
you are beyond repair and beyond hope. One day though, the sane will rule the country again. Meanwhile, Bandar ke haath main machis lag jai tu wo apnay hi ghar ho aag laga daita hai.

TheJakal
TheJakal Day 2,076, 18:22

You know I grow tired of your constant bickering, not only are you totally useless but you are annoying and self centered. You were useful when erepublik had its bot on but ever since than you have been totally not useful. Not a single penny contributed towards any war effort or national campaigns and here you are bitching about taxes all over again. The economy is broken dodial, wake up and stop trying to act smart when your just a dumb. There is not enough demand locally period.

P.S. I loaned you 225 gold which to this day you haven't returned, yes it was because raao asked but it was also so that the country gets q7 tanks, where are they? By now you should have a couple of thousand saved up.

Yet you will turn back and blame me for the 800 gold that aovelhanegra and you swindled away. Your pathetic and useless.

To this date, you have been unable to provide records of gold loans, cost of iran war, that's how arrogant and foolish you are. So stop insulting people dodial and play the game quietly.

TheJakal
TheJakal Day 2,076, 18:23

and if you cant play it quietly than I will start complaining to Plato of your complex issues, false accusations and harassment. This game has no space for losers and yes you are a loser.

dodial
dodial Day 2,076, 18:50

abay ganjay kab tak jhoot bolay ga. iss umar main jhoot boltay howay sharam bhi nahi aati. 800 gold national orgs main se harap ker gia aur phir itna bara drama khara kia us ko chupanay ke liyay. i told you once and a million times, i donot have time for your silly political stunts in a virtual world. abhi shair chutti per hain tu chuha ban ker naach.

TheJakal
TheJakal Day 2,076, 18:58

LOL, you think you are a lion? You could pass for a circus clown. I don't need to pull any political stunts, my statistics speak for themselves and I am so happy you have realized this is a virtual world because it looks like up till now you had no clue. Aovelhanegra accepted to taking that 800 gold, where ever it went. As for the remaining gold in Pakistan Army orgs which was about 300 that was spent on war expenses, still no where near to what I have spent, but your such a, uhm whats the word... ah yes a bekhari. Return my 225 gold ASAP.

Heart Stealer
Heart Stealer Day 2,077, 01:02

Bandar nay 16 din pehlay aag lagai this aur bhaag gaya china sahi kaha waah kia baat hai

dodial
dodial Day 2,076, 18:07

for those who can think on there own, a picture speaks a thousand words. Here is a screenshot of our market after import blockade. Now wouldn't that bring the crowds in. A total of 51 tanks under 10cc.
http://i43.tinypic.com/2poxrgx.jpg
think of the millions in taxes if all of that was sold.

Heart Stealer
Heart Stealer Day 2,077, 01:00

Why u did not posted the screenshots of serbian and chinese market at the time u took that one from pakistani market??? coz serbian market was higher then Pakistani market and still u think u will be able to support ur foul claims with a single screenshot Beta teri dukaan band hogai hai rona band kar kuch mehnat mazdoori karlay

Shumaila
Shumaila Day 2,076, 21:49

voted... plus dodial bro if u don,t like it get active in pakistan.bring a law and change it.no place for persnol likes or dislikes.

Heart Stealer
Heart Stealer Day 2,077, 01:05

He changed laws for his own personal gains and as the law was passed he quickly changed his citizenship and switched to china to gain more bonus and to earn more and more by robbing Pakistan. That is a splendid example to treachery! We dont need the circus loins who betray their own country and peoples. He even tried to use his minions to stop this law from passing but he had only two Dont expect something patriotic from traitors.

St0L3n1
St0L3n1 Day 2,077, 07:50

I will make simple for everyone

Market depends on buyers and we dont have many of them. We can manage the market with local sellers if we mobilize ourselves in a organize way. In that manner our local seller can earn more benefits and we can have more jobs applicants.

At this point the increasing import tax on anything wont make any changes to ePakistan market. So we are good with that taxation at the moment, once we start earning around 6 bonus on weapons and have the population around 2k+ then sure we should decrease import tax on weapons.

Regards
St0L3n1

 
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