Reducing Import Taxes for Weapons and FRM
Day 2,865, 16:10
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Published in Australia 
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by
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by J Seemore
Dear congressmen,
I want to propose some tax changes. Our economy depends of global market and global events, but also the main factor is number of local producers and the current bonuses we have.
When you go to Australian market to buy the items all prices should be near the levels of Top 10 Nation. Often you are located in a place outside our territory and then you can choose the domestic market or the foreign one. Comparing the prices you will make the most economical advantage decision. Same you can do when searching new employer for better salary.
Reducing import tax for weapons from 15% to 5%
Using workers for producing highest quality weapons require full bonuses for this industry. All Australian players with Q7 weapon factory will score profit if they work only as manager. I assume the owners of such factories will use their production for own use.
All Q7 weapons in Australian market are manufactured abroad. Those produced here are not based on rational profitability management. When buying the aforementioned items 3% of the price go to the Country Treasury. (VAT = 3
😵
15% import tax will stop everyone with different citizenship from placing weapons to our market. If we reduce this tax to 5% the chance to see foreign offers will be much higher. 5% is enough to protect local speculators or the eventual local producers. Even 5% is high but let we make the experiment now and in later stage we can make another discussion with numbers and deep analyzes.
Nowadays we buy our weapons from all available markets including Black Market. Sometimes we send 3% when buying them here. If foreigners come to our market we will be motivated to buy their weapons even with a little bit higher price but knowing that we will send 8% of the total sum to our Treasury.
In conclusion I can say that we have nothing to lose by voting 5% import tax for weapons. There is a theoretical chance to increase our incomes.
Reducing import tax for food raw materials from 15% to 7%
We don't have so much FRM on our market to fulfill our needs. Our food factories consume grain bought from foreign markets. Sometimes we see players with different citizenship to place good offers here. "Sometimes" is not enough - we want regular delivery and that could be achieved by lowering the import tax.
7% looks pretty reasonable. I expect to see fine offers in the whole first page. Let me remind you that buying from local producer you stimulate his economy but you don't send anything to the Treasury. Same is when you buy from a place abroad. The only way to send some funds for Government needs is buying FRM from foreign players offers placed on Australian market.
We have to be open for the Global Market. Our consumption will remain the same but when we set the proper taxes according to current situation then we contribute to the budget.
The benefit will be for our community!
This article is published to open a discussion about tax rates. We can find other numbers instead of those I suggest. For this reason a poll in our forum will not be created at this stage. Once we find the right percents we will vote those proposals.
Yours:
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Comments
First off, I am neither for nor against these proposals. Please, convince me. I do have some questions and queries though.
1. Does anyone seriously use the seller's CS to decide their purchase? I will happily admit to buying the cheapest available with a quantity I need. If I did let CS influence me (all other things being equal) I would buy local first anyway.
2. A market licence costs 20 gold. Nobody is going to buy one without an expectation of extra profit to help pay for it. They then have to pay extra tax. So, people exporting to eAustralia will always be more expensive than local production. With 40% weapons bonus, a Q7 factory has a breakeven salary of about 75 CC. Only one employer offers more than that, and I don't think profit is his motivation. Everyone else using employees for production should be making money.
3. How is it that we have 70% food bonuses and no FRM?! Where are all the farmers??? If I understand my eHistory properly, most farmers became established after the Black Friday crazy discounts. That was awhile ago now, and we don't have many eAussies from that generation still with us. Is that why? Or is it because of the XP gain (that can't be deflected with a pack), so only D4 really wants to get into farming?
Unless I'm even weirder than I think, hell yes CS makes a difference in the marketplace. I will always pay a little extra to buy from someone I know.
Hey JT I have WRMs on the market it for 1cc per item... I am Australian, please buy 😛
Rusty D, I am also not an NGO... http://i.imgur.com/pNI3LV2.png
I dont even know how that got there...
Make your calculation about the profitability:
https://docs.google.com/spreadsheets/d/12zxWk3teeiJaLvi3IKx0JRnQ_XYNKnF3P2RG61t3Szg/edit#gid=0
1. If I can buy tanks from the free market for 9.5 and manage to sell them here for 9.99 cc (paying 0.3 cc for VAT) then why not foreign producer to place similar offer? When buying from foreign CS you will put much more money to the Treasury. CS matters so pay attention.
2. There are many players with Australian market license - don't worry about that. They bought it during the time we were constantly wiped and all our taxes ware at minimal rate.
About the profitability with 40% weapon bonus - set the right numbers and you will find that workers can't give you the profit if you want to sell the weapons via our Market.
3. With 70% food bonuses all players may want to work with factories instead with companies. TW hits mainly the companies and Q1 food factories. We have a problem with FRM supplies and we have to solve it so the Government and producers to gain benefit from our domestic market.
Trust me, I have a big ol' spreadsheet to run factory profitability...
You are oversimplifying things by ignoring the black market. Large producers of weapons, ie those with employees, because 900 odd gold for a factory is a lot to spend without them, will have their own sources of WRM. Honestly, needing 2800 WRM per employee shift at the moment really precludes buying it off the market. So, like Rusty says somewhere else in these comments, arms dealers will buy 200k+ at a time for a discount price. Say, 2.5CC each. There is no way to stop this transaction, and no desire on anyone's part to do so.
The factory owner wins with cheap RM. The citizens win with cheaper goods. The RM seller wins by selling bulk product quantities quickly.
Re: reselling. Yes, I know about it. I used it for months to make a few tens of thousand of CC. Now I have no time, the margins are lower and I have enough factories that somebody else can exploit this niche.
I really could care less about CS when buying (so sue me). If it makes the treasury money or not, whatever... They get something from everything except RM sales. And I would still rather buy local, so the seller can invest their profit in more factories.
WT is still not high, with the worthwhile FRM companies making a profit. Still. So, why not run them? Making 5 CC is better than making 0 CC...
I would rather buy items from local producers too, but where are they? If right now we need some goods will be much better for our economy to buy them from here in a price similar to world's lowest prices.
Yesterday I bought 40K FRM from Bulgarian market, because there was no 0.03 cc price in Australia. If there was local producer or foreigner offering FRM in Australia for 0.03 cc then I would buy it form here. But my hands were tied - I wanted but I couldn't support our producers because they don't appear. If there was any player with different CS offering FRM I would buy from him and sending the value of import tax to the Treasury. I find that we don't meet such players because 15% tax is too high.
If you make the calculations for Q7 you will see that even if the price for WRM is 0.03 cc we can't score a profit when using workers. Black market is a factor but no one will sell his WRM for less than 0.03 cc because wherever he place the offer with 0.03 cc his goods will be bought immediately. There is no market price lower than 0.04 cc (the real price for WRM is 0.032-0.035 cc and you can make the calculations with these numbers)
I can easily put upto 100k of FRM on the market each day if you want J.... actually I might do that.
And how we can benefit from that? We won't send any money to our treasury and you won't benefit from this deal as you are not FRM producer and you will buy for 0.03 then you will sell for 0.03.
Leave that.
Not a FRM producer? I have more then 15 FRM factories. But due to all the energy used I don't work in them, I work in what I need. Plus my workers do a lot of over time. So the country will benefit as the FRM will generate taxes
If you can produce FRM, then do it. As you point you will send some cc to the Government through WT + you will earn profit from the deal.
Also Government will make profit when we buy from foreign accounts placed offers in our market.
But if we buy anything from other markets only or we are not stimulate to produce goods then our National incomes will suffer.
I disagree with you here, J. But I could be wrong, it has been known to happen once and awhile (ask my wife she thinks I am always wrong).
With the weapons, I am a producer (6x Q7 Facts), I keep a percentage for myself, a percentage to fund pro bono work and a percentage I sell on the black market. The actual costs to make these weapons is low. Many mass producers either have their own WRM factories or they buy WRM on the black market. So even if we lowered the taxes, I do not see a big giant increase in Q7 weap sales on the Australian market.
As ID pointed out, the cost of these lic are way too much for the new producers and the old ones have an already set up sale system. If they re-sale Q7s they use scripts to find the lowest prices and then sell it on their own market. Plus they tend to make it for their MUs etc.
With the FRM, we dont have a giant market. I myself have gone and bought it from other countries for cheap and then sold it in Australia for a 0.01cc profit per item. Most people who produce know this and will always hunt around for the best deal or secure deals via the BM. Also I was under the belief that buying here from locals you have no tax. The only way we can make it profitable for Australia is to encourage select players to be complete 'FRM' farmers, work for themselves and sell what they make on the Australian market, to encourage others to buy it.
If you don't see a big giant increase in Q7 weap sales on the Australian market that doesn't mean you have to be disagree. The changes will works for our favors but how many players will place their production and when they will do it I can't tell you.
You buy WRM for 0.032 cc may be and still I can't find your profit if you give salary around 70 AUD. (the real price for WRM is 0.032-0.035 cc) Sometimes might be more better if you sell WRM that you produce, rather than placing it into Q7 factory and making wps without sensible profit.
The current market price for FRM is 0.03 cc. (real price = 0.027-0.03) If you found it for 0.02 cc then the quality will be not enough to pay your travel expenses from 0.01 cc difference. Where are the locals to buy items form them? We must use our market since we have full control of our incomes from taxes. If we stimulate the foreigners to place their goods here we will send extra currency to CT every day. Creating local FRM farmers is good thing, but here we speak about taxes and how that will directly reflect to our incomes.
I tend to buy bulk, hence why I get good prices. For WRM I will buy 200k at a time. Granted the mum and pop shops won't buy enough to make major profit, but it was more illustrating the point.
The best way in my uneducated opinion and being half asleep at the moment, would be to encourage some sort of government program to ensure the money comes back. Eg. Sponsor a group of people to produce it and make it available for the market.
Something similar may be:
http://www.erepublik.com/en/article/farmers-2423210/1/20
But still it is something aside from the taxes.
I was more thinking along the same lines, if it was government sponsored (a quick short version with random numbers):
Player A has 20 FRM factories, he got the gold via a government loan/scheme.
Working in his own factories he produces: 8,500 FRM (using Australian bonuses)/255cc worth at 0.03cc
Of that 200c goes to repay his loan
55cc goes to him for his effort (rough figures, but would be better with a percentage).
Australia still makes profit from taxes.
This is just a small scale thing, but like in your article if we target people who a Div 4 and not afraid of leveling up, it could work in Australia's advantage.
... and we will be stimulated to defend our bonuses at all cost.
I like these suggestions. If, as ID suggests, the prices don't improve, well, we haven't lost anything by the experiment.
Do the discounts ever include startup of RM companies? Not that I've seen, but maybe so... I would love to see that, I would have more RM companies for sure rather than have to check the market every place I go fight to see if I can pick up a deal...
I think the XP is a pretty slim argument against production; unless you have like 20+ factories it takes months to level up; that would translate to years to go up a div.
Anything that will let us buy cheaper Q7 tanks, I'm all for it. 😃
Use this to find the best deals:
http://www.erepublik-deutschland.de/en/tools/marketplace
Anyone who is keen to be a RM producer, PM me, I can assist you in making it all work. But you will need to jump through hoops to ensure that your a safe person for the loan
Yep, farmers have 20+ companies. Instead of upgrading a factory, well, you buy another fishery. At 210 FRM per fishery you need 20 to make 4000 FRM. Which probably keeps up with 1 factory mogul. So, yes. XP gain from farming is dangerous for D3 or less.
Discounts don't work for new companies. Once upon a time, there was a big promotion called Black Friday (http://wiki.erepublik.com/index.php/File:Black_Friday_2014.png). New RM companies were 55% discounted, which is just giving people free money. That's what I alluded to with crusty old players. I don't think we will see that promo again.
We will.... We had it last year
CS matters to me in the marketplace. There are some citizens I won't buy from.
Im stuck in da middle on this one. I like to buy from the cheapest no matter where I have to go to get it. So I could go either way on this issue.
The biggest issue I see is we could have it were FRM is profitable at 0.02cc for the farmer, but all it then takes is some one to buy it and resell it at 0.03 and in turn make more money then the farmer. Many people do that already
Speculators.
You found a supply for your Q7 wps factory and you buy them for not less than 0.03 cc Let we say that it is 0.032 (if you want WRM for that price I will give you the contact) Then it comes the question if you know other players who would buy same WRM for 0.035 from you. Then will you resell them with 9% profit or you will put them into the factory?
Speculators exist all the time - it is not from today or the near past months.
When I was CP/Dick I had around half a dozen tax changes, but the ultimate goal was to base the tax structure off 0 resource bonus, as that has proven to be a common thing here 😛
So basically you have 20% intervals, When I set VAT at 3% I set Imports at 15% (3% VAT with 0% resource bonus means you need to set Imports at 5 times our resource bonus which is 15%,)
If we had 100% resource bonus the you could match VAT to Imports, but currently we are at 40% WRMs, this means we can only drop the Weapons Import tax to 9% before locals can't produce it cheaper than overseas sellers.
Only way taxes are fair is if it benefits the locals first, or people just pack up and leave or stop using the market altogether, so the formula has to be VAT as the base number, and then import taxes are then scaled according to resource bonuses, hence the reason I don't think 5% will be fair.
9% ftw \o/
It is not working this way Henry.
In RL I have company and if my yield falls with 30% my profit will not be decreased with 30%. No, it is not that simple - I will score deficit, because I have constant expenses to cover.
Same here - if you produce wps with 100% bonus you will make profit, but with 60% bonus the production will not be enough to cover your employee's wages.
I realise that wages and local trends have an impact on prices as well, but if we have importers who work on 100% bonus and we are at 40% then the Import Tax must be relatively higher than VAT to compensate for the difference in production.
Yes, Henry.
5% import tax is around 0.50 cc. If you are local producer or speculator you have to fit in these 0.50 cc for 1 Q7 . That is the the Government protection. Or else we will block our market and everyone will buy from other countries leaving VAT abroad instead of here.
When I was CS of Brazil each worker or manager work I produced 20 Q7 weapons, in Aus I make between 10 and 16 (currently at 14) so I base my numbers off actual production per worker, not what market prices might be, if I pay a person a salary then I need to equate that through what resource bonus I have, as In our bad times we make 10 and in peak times we seem to hit 16 (weapons) while other importers are making 20 .....
The tax you propose will equalise dollars per unit, but the issue is more on they (importers) have 4 extra weapons to sell that we can't produce, therefore they have the upper hand, so to counter that yuou need higher Import Taxes.
Maybe go to 10% initially, see how that fairs for a month, table it and compare to now, then revaluate again, 15 to 5 is a big jump and might send mixed messages
The market is open and if you must produce your items with a price equal to the wold prices or the clients will choose another market to buy what they need. Then you will left without any profit and the country will be without any incomes from taxes.
Everyone say hi to Rusty
http://www.erepublik.com/en/main/messages-compose/8441119