Welcome to the first of nine planned crossover articles between The Economist and The Unity Party (TUP), which is a political party here in the UK. This month I’m Party President of TUP, and it’s my goal to increase the ingame profile of the party in such a way as to inform and help UK citizens without hammering on the usual boring recruitment propaganda.
This is part of a new project, called “The University”, whereby we’ll be trying to involve and educate our members, and any other players who want to be involved, through lectures (like this article) and ingame discussion via tutorials. Please note there will be no recruitment involved in this, there will be no requests from us for you to join or do anything else. You also don’t need to be TUP to lead or help out in the project, so if you’re interested in being a Tutor, please let me know!
This first lecture is going to be focused on the economic side of the game, and specifically on imports and exports. A lot of the data I’m using in this article has been provided by MagicHereos, who is TUP’s tech guru.
So what are import taxes
We’ll be starting this article with the basics- what are import taxes? Import tax like all taxes are levied by congress, using the administration panel. Import taxes apply to all goods- so you can tax raw materials, food and weapons. Import taxes only affect goods sold using an export licence- in other words if you have non-British citizenship and are selling to the British market. Import Taxes are cumulative, so they combine with VAT. For example, with 10% VAT and 10% import tax, a £10 gun will take £2 in tax. This is important when you’re working out whether it’s financially viable to export abroad.
How do I export to other countries?
It’s a less used feature these days, because many countries have very high tax, but you can sell your goods in other markets. When you start eRepublik you’re automatically given a licence to the country you live in- probably the UK for most of you. If you move citizenship, you will need to buy a licence to sell to your new country- this is the most likely condition most of you will get one under. Licences cost 20g each, so it’s not a light decision to make.
To access your storage screen, press CTRL+S on your keyboard, or go via your profile.
You will see a box like this below your storage. This is where you can sell your products. Under your market button (where the UK flag is) you can see a little button. Normally this will say “purchase licence” or something, but mine is a bit different because the admins gave you 1 licence per org you used to own when they were dissolved, so I have them already. When you click this it asks you to choose the country you want, then click “buy market licence” to acquire it. At this stage you can change the flag to your new licence, and begin selling!
OK, so I want to export, where should I sell to?
These days the markets are very tight, but there are some tips I can give you. First of all you have to analyse the markets. For this I have a google doc sheet which calculates the prices of current weapons on sale, the tax, and the profit margin. It’s possible to use scripts like eRepublik Advanced (for chrome & greasemonkey) which do the same thing, though less well in my experience. Alternatively you can just grab a spreadsheet and do it yourself, like me.
Here you can see my sheet. It shows you the prices of weapons before and after VAT, Import Tax and both. It calculates the difference between the cheapest sale price in the world (usually Brazil, China, Poland or Serbia) and the local price. This means you don’t even need to have a Q7 company to profit- you can simply buy and sell other people’s guns. As you can see, if you have some capital you can make profits- provided the guns sell.
Judging your market
Markets can be confusing. For example, Denmark seems to be very profitable, until you look at a map and realise nobody can access the market to buy your products because the country doesn’t exist 99% of the time. Similarly countries like Norway & Israel have very small populations, are frequently occupied and thus selling large amounts of weapons is impossible there. What you are ideally looking for is mid-sized countries with low tax rates, reasonably high turnover and a lack of domestic supply. With only one licence to use, your best bet is somewhere like Belgium which though small has a reasonable rate of sales and a decent market. You won’t sell loads, but enough to make the 20g back over time.
If you have a little bit more money you can have 5-6 licences for countries like Chile, Australia and Slovenia, which you can see are profitable at the minute. This however is dependent on the market at the time- demand rises during wartime, or during domestic shortages. It could be that all those countries have price drops tomorrow, and the export licence is useless for a week or two. That’s why exporting is really quite a gamble, and unless you have a lot of resources risking countries like this can be a mistake.
Wait a minute, what if I produce my own guns?
If like me you produce weapons yourself (or at least have the ability) you need to calculate first of all whether it’s profitable to do so. The labour cost (for workers) is the smallest part of the cost of making weapons- with wages around 10 currency (cc), the cost per gun of production is between 0.5cc and 1cc depending on your bonuses. The cost for raw materials is currently 0.03cc per gun, which means that a full Q7 gun costs 6cc to produce using raw materials. If you work as a manager, this is the only cost of course, but using workers you need to add 0.5-1cc onto that for your labour costs. So that means a Q7 gun costs (in simplistic terms) 6.5cc to produce at a minimum. Anything less than 6.5cc sale price and you are losing money by producing them. There are still good reasons to sell at below this price- for example if the market has a saturation of WRM, or you want to subsidise the market, or you just need money quickly. In fact I am currently making a loss on my own weapons production, but it’s easier to shift Q7 guns than WRM, and my storage isn’t large enough to hold more than a few days worth of WRM production.
Now we see that exporting can suddenly become more attractive. I can make more money selling guns to Slovenia through import and VAT than I can selling guns at home. This makes it profitable- and in fact I sell 80% of my weapons abroad to foreign markets. High VAT forces domestic producers to sell abroad, and this benefits foreign nations. With a single currency there is no real need to have high import taxes either- even 100% bonuses only increase the cost of home produced goods by 0.5cc these days- which is about 8% difference in price. Therefore if we changed our import tax to 8%, we’d be on a par in terms of production costs with foreign producers, and we’d have a much busier market and therefore lower prices. The income from this would also mean we could potentially reduce VAT, making our home market more functional. Remember: People are mobile!. There is nothing stopping anyone moving across the English channel into Poland for 20cc, and buying their guns there for 1-2cc less per unit. Our VAT price drives British consumers abroad.
Some people will probably be surprised to hear me taking this position. But it’s a natural and logical step to take. Historically the UK state has been a large one, and has had high taxes. Now no amount of tax is going to provide enough money to adequately supply armies or prosecute war. We need to stop thinking of the state as the main body of defence for the UK, and instead look to our players to provide funding and supplies during war. Already our defence is in the hands of private armies, so we don’t need high taxes anymore. Our main goal should be the maintenance of around 10 MPPs with key allies, and a little surplus to build a safety net or pay for any joint ventures with our alliance if asked. Plus of course, with taxes often less tax can generate more income.
Thanks for reading! Tomorrow we’ll be opening our first seminar groups to discuss this topic, and of course I’d be glad to hear everyone’s opinions on it. All TUP members have been enrolled by default, but if you come from another party or even another country feel free to either message me or sign up in the comments, and I’ll add you to a discussion group.
TUP Party President
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