ZERO TAX IDEA FOR SOUTH AFRICA
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Deniz Khazari
The New World's smallest and youngest country, South Africa, is back on the map. You can currently get here buying just one ticket from anywhere in the world. You dont have that privilege in the monster fighting top ten countries. War is everywhere.
Moving to Limpopo (the only region of the country) you will notice there is no jobs. No businesses settled. Not much fun actually. Just a diamond rich country of 70 citizens. (15 vs. 14 average citizen level though). Most of those will travel back to their employers.
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What will make this country flourish? My idea is that the country has to withdraw all the taxes. Bring to humble 1% if not making them zero. Then the businesses will start placing companies here, invite people, manufacture cheapest products and trade to the New World without the burden of taxes.
I encourage the managers globally to start a discussion on Tax Free Zone - South Africa, weight pros and cons together.
USEFUL LINKS:
http://www.erepublik.com/en/country/South-Africa
http://en.wikipedia.org/wiki/South_Africa
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We can't withdraw taxes as we have no congress.
Even now our president is officially the Indo who PTO'd us.
We'll have to wait till the 5th at the earliest to improve the situation, and that's assuming the president can adjust taxes and the minimum wage.
Yes, N4ked Sn4ke, but by the 5th of August we must be ready to give the best offer to the New World, to make South Africa competitive.
Competitive eSA businesses = Competitive eSA
A near tax free zone is a good idea. We need to welcome foreign investment into eSA.
No the president can't propsoe taxes unfortunately.
If we have no taxes how will we make money? Just a thought.
This will encourage massive raw material trade. Making low taxes legal will help your government collect more taxes than some others fail to collect with 20%%.
> Ines, as our (most evidently) next president, you will just need to support that. With 70 people population and zero businesses we will collect less taxes than 1% with migration of the companies to Limpopo.
There's a difference between low taxes and NO taxes. Deniz is proposing no taxes, which isn't sustainable. Businesses would be chuffed up by this, but our struggling economy will not be.
Ok, maybe there are only 70 people in the region due to the fact that there are no jobs, and there are no jobs due to the minimum wage of R1000. That's like 24 gold a day.
So as we mentioned in all of our articles up to this stage, we'll have to wait for congress elections before we can do anything. After that date there is a full economic recovery plan which lowers taxes, as these taxes we the wonderful gift form the PTO congress.
I'd recommend those of you who can to leave the country and create wealth for the country until the day that we have a congress. There's no use hanging around waiting for people to pay you exorbitant salaries...
100% tax on 70 people's income is nearly the same catch with zero.
(as i mention in the text its "Bring to humble 1% if not making them zero"). this has to be in parallel with inviting the big raw material players to buy licenses to South Africa. (Budgeting this growth is another question, that has to be discussed).
there are many many questions, for we almost settled in the middle of nowhere now.
and we need to start the debate and reach some understanding of where we go _before_ the congress is elected.
to the certain extend govt needs money to pay for its expenses. this might be achieved _not only with taxes_, but also by creating and proper management of the State import-export chamber, and some profitable entities.
Join the forum: http://z6.invisionfree.com/eSouth_Africa/index.php" target="_blank">http://z6.invisionfree.com/eSouth_Africa[..].php
Put these ideas up for discussion there
Deniz the one point you need to understand is that by the time we actually can physically change taxes we will have way mroe than 70 people here.
Steven, Ines > Thanks, and Yes 🙂
Low Taxes will spur Industry to locate to eSA and employ anybody they can get their hands on. Since the population is low, wages will likely be high as competition for workers intensifies.
Low Tax. High Wages. Who could as for more? 🙂
I don't really see how this is workable. Yes, low taxes might attract new diamond companies to eSA, but raw materials companies are a completely different kettle of fish to manufacturing/construction companies. Why? Because manufacturing is mobile, while raw materials extraction is not, and this means that most countries in the eWorld have low import taxes on raw materials that they do not possess, high(er) import taxes on raw materials that they do possess, and high import taxes on manufactured goods. Manufacturing in eRep doesn't locate where taxes are low, it locates where markets are large.
Simply put. If we have very low or zero taxes across the board, I still don't have a huge incentive to locate manufacturing/construction firms in eSA. I will be limited by the size of the Limpopo/eSA market and the fact that the rest of the world is basically protectionist. If I export, other countries' tax rates will ensure that their governments take a whack off my sales income and eSA will get marginal revenue from me in the form of low income tax... In fact, what I will rather do is just establish a company elsewhere, buy an export licence to eSA and export to my heart's content, ensuring no economic development in eSA beyond diamonds whatsoever.
In a world generally characterised by low raw material import taxes and high import taxes in manufacturing and construction, tax free zones will destroy local economic activity apart from diamonds, and bankrupt the state. There is just way too little complexity in the eRepublic economic model to support this type of policy and that's why most countries follow moderate income taxes and VAT, high import taxes on final goods and raw materials they possess, and low import taxes on raw materials they don't possess.
Lets not forgot, Taxes only benefit 1 group. That is the Government.
And they only take from one group. That is the Citizens and Businesses of the country.
Now everything is a trade off... Low taxes mean the people control the economy and the consumption of goods. In fact, you could argue that the people have absolute control over the economy when you have 1% or less taxation. Now the trade off is that Government has zero money and thus, zero power. It cannot fund a military, but defense systems, etc...
Now if more money is shifted from the people to the Government, then the Government grows in power and influence over the lives of its citizens. And where the money flows, so does the corruption. In any case, Low Taxes will yield advantages for businesses. The issue with respect to Raw Materials comes down to land ownership. We are sitting on a diamond mine which is good for everybody. Its the Nation's cash cow. The goose that lays the golden egg. Outside of that, we'll need to think about the future of land ownership.
We might have to see if we can make a Land Purchase from the Brazilians or Indos. Cause we also need Grain.
Ask Brazilian government about taxes they collect. Ask why the prices for wood (high Brazilian wood!) are not in the top 50? Ask why the Q1 house in Brazil is 5G vs. 3.2G in France.
Everything is traded outside the market. With large buying masses its okai, because Brazil still has volume of newcomers that dont calculate.
Russians dealt with the problem by involving a Ponzi loans scheme. Govt donates (loans, that are bad debts from day 1) to businesses that gather 10 people - and bankrupt slowly. But RL Russia is hell lot of 150 million people.
With little countries it is more complex approach. Need to tailor everything
hmm take a look at polish taxes - i appreciate them and have mine companies here. 1% line VAT makes no sense to trade via donate (fast sell at 0.01 to ommit tax) so everybody is paying.
I have no idea about income taxes to be honest 😉
asd - theDarky here (darksideltd)
I think we will need a "Most Favored Nation Trading Status" with whomever that can supply Raw Materials to eSA.
Tax rates are not the issue (once we get them down to workable levels after the next Congressional elections of course).
Companies will set up in eSA if there is sufficient demand for their product and that means a high population.
Citizens will come to eSA (and choose to stay) if a) they have an opportunity to fight on a reasonably regular basis and b) they can purchase food and weapons cheaply.
Income tax won't be the deciding factor in many citizens decision to move here and whilst VAT is certainly a consideration for most companies a 1% VAT rate won't save you if there is no domestic market for your goods.
I could start a weapons company and have my org buy my cheap Spanish iron.
I think that low taxes are gonna get you a lot of companies.
I have already opened company in your country. Too bad that the minimum wage is too high.... But I can wait, and i will 😉
Yup, Serbian Industry, that's cool to know you created a company here. Unfortunately you will not be able to use it before the taxes and wages are settled.
I do not think eSA will want to be a tax paradise once again.
Let's only favour those industries that cannot supply our population(wood, iron, oil etc)
The state will need money if we want eSA to be an attractive location to live in what with hospitals and mpp's and such.
I know Deniz, I have another organization in Serbia, and I have few more companies on that organization. Waiting won't be a problem.
I think import taxes on everything except diamonds should be low, on diamonds you should have 99% import tax, because you want to stop other countries to import things you already have. And you must have low import taxes on other raw materials because you want your companies that uses these raw materials to have profit. And of course high import taxes on food, gift, weapon, moving tickets, and low income and VAT tax.
I also think that you should not accept a lot of Foreigners that want citizenship, because it's easy to TO country with low number of citizens.
I like your country in real life too, I wish you all the best. 😉
hospitals and MPP dont come in the same pack. hospital is something that could be arranged without hurry.
i can arrange that
The Q5 hospital and chance to fight will bring many people in - Please support the Q5 hospital idea
Yes, but you have to take care about salaries, if there is no jobs in one country nobody would like to live there.
Right?
Maybe we can ask admin to arrange special congress elections or something like that.
I think we should just make money by having resistance hero lotteries...that seemed to work well...😛
Low taxes to jump start the economy is a good idea, but we should still have a high import tax for diamonds and gifts to protect our one native industry.
my personal view is that we dont need protectionism to the local market of 100+ buyers (i dont imagine this population enough for even covering a demand what one factory produces).
protectionism with high tax (check Brazil) will lead to the situation when prices for gifts will rocket locally. in Brazil they have the highest price for everything. very stupid, 'cause most of the trade is going outside the market.
like DarkSide org mentioned above keeping the taxes at 1% helps poland to get people concentrated on the official market to the benefit of the nation.
if the import taxes for everything are reasonable - then businesses will buy licenses. very important for the future growth of the eSA