[WYD] A Case For Lower VAT Rate on eCan Tanks (Day 1777)
Day 1,777, 08:54
•
Published in Canada 
•
by
•
by Addy Lawrence
FOREWARD
eCan is having a financial problem. No, nobody has stolen anything. The problem is that there isn't much worth stealing in the government coffers. I've got a suggestion to increase the tax revenues.
The purpose of this article is to alert the eCan government that they are missing out on approximately $450 each day in VAT taxes because I’m buying my Rocket Packs in eUS where the tanks are cheaper.
There are many more like me and it's an untapped resource.
SHOPPING HABITS OF THE RICH AND INFAMOUS
I have a Q4 Rocket Factory and I regularly buy what I call “Rocket Packs”. A Rocket Pack is 100 each of Q1, Q2, Q3, Q4, Q5 and Q6 tanks. Q1 through Q4 tanks are usually sold below the variable cost of production (WRM cost) and really aren't worth making so buying is the standard operating procedure. As for Q5's and Q6's, they are usually sold at above the variable costs of production so you are better off building them if you can. I try to build my own Q5s and Q6s but I can’t produce them fast enough to supply my use of Q4 Rockets. This is a good thing if you are a merchant of these guns.
SOME PRICE CHECKING
I'll use this morning's prices for reference but the conclusions are consistent over time.
A Rocket Pack in eCan runs $3,367 whereas it’s only $3,125 in eUS. I’m saving $242 each day by buying my Rocket Pack in eUS. Here is the kicker, there is $489.22 of taxes (17% VAT plus 1% import, if foreign) in the eCan Rocket Pack and only $30.94 of taxes (1% VAT plus 5% import, if foreign) in the eUS Rocket Pack.
Think about it. As an eCdn I am saving $242 by cross border shopping but the government is missing out on $489. The government can improve it's situation here. If the government reduced their taxes by $243 ($242 + $1) then I would change my buy decision and shop locally. This would earn the government $246 in taxes. In fact, I would be willing to pay even more, up to $60 more, because I would avoid the cost of a move.
VAT in eCan is 17% right now. A $243 decrease on total tax of $489 represents a 50% cut in taxes. Lowering VAT from 17% to 8%, even 9%, would change my behaviour and generate additional revenue for eCan.
THE OPPORTUNITY FOR GOVERNMENT
Getting gold buyers like me to change their buying patterns will help with putting tax revenues in the government coffers. At $250 a day in VAT for 30 days from me alone, three quarters of an MPP is paid for. Think about it.
The bot is still active and it doesn’t buy at prices above the threshold. eCan’s poor production bonuses and high rates of VAT price tanks beyond the threshold. The low volume of activity on both the bot market and the free market translates into weak revenues.
DENOUEMENT
I can hear the trolls now, "Weren't you the advocate for VAT-centric taxation?" Yes, I was and I still am. VAT is the primary source of revenue. The bot and the behaviours of tank buyers have changed though, and the value of the VAT is more relevant than it was in the past. It is too easy to "comparative shop" in eRep and people don't pay premiums for nothing, even the bot.
Lower the VAT to get to a competitive price.
Who's your daddy?
Addy's your daddy!!!
Facebook
Twitter
Discord
Comments
Please consider voting and shouting this article:
A Case for Lower VAT rates on eCan Tanks
http://tinyurl.com/WYD-1777
eCan's tank market is a bit slow.Even if you put Q7s at the lowest price on the market (as I did last night), it will sit there for hours and not sell. But then again, I'm not an active Q7 seller in eCanada so it may have been a slow day yesterday
But it is true that serious tank buyers spend 20 or 40 CAD to hop across the border where tanks are 4 or 5 CC cheaper. If you buy more than 10 tanks, then it equals savings over the moving costs
Just like the RL Canadian border and US shopping!
But I notice we just changed VAT on weapons from 12% to 17% about 12 days ago:
http://www.erepublik.com/en/main/law/Canada/116036
If we have the data, we could compare what that 5% increase in VAT did to revenue in the short-term (because revenenue will go up immediately) and long-term (because it could drop as people change their purchasing habits according to the new prices).
Bouncing taxes around with no attempt to track changes is getting ridiculous. If we don't have the data now, collect the tax info for the next 2 weeks, then change the VAT to something lower and then compare the difference in tax rates.
Of course, we get unexpected rocket-building missions that skew the results of regular tank buyers, but heck, that's the best we can aim for in this game.
So, did we track the revenue changes since the VAT increase 12 days ago?
If I'm correct in my math and the numbers from some old september spreadsheets and calculations I made, before the tax change, our average revenue was $10,358 on average. After the tax change to 17%, it is now $14,560 on average.
^ it appears ElPatoDiablo is my Daddy.....
EPD is correct...
Of course, we get unexpected rocket-building missions that skew the results of regular tank buyers, but heck, that's the best we can aim for in this game. x2
So we'll never be truly in the best possible spot for our VAT
My initial math (which was done in like 10 minutes frantically between classes) may or may not account for a few MPPs that we passed. If it doesn't, then the taxes still brought in about 12,000-13,000 which is about a 20% increase in revenue.
*cough*Original 5th Tenant of MDP*cough*
pardon my old roots
#5-Taxes will be used to fund the nations military units to help them acheive maximum efficency through programs aimed at both the MU and its members.
The only thing we spend taxes on are MPPs and MU Funding. All parties want the same thing now. Let's try to agree on a tax rate that gives us what we all want (MPPs and MU Funding) and leave behind our old roots.
eRep needs a foreign buyer tariff.
*cough*Original 5th Tenant of MDP*cough*
____________________
again with the tenant??? a tenant is a person who pays rent to hold a lease. A tenet is an idea which you hold dear. Tenet. From the latin teneo - as in "tendency" "tenuous" "tenacious" "tenterhook" "tendril" "attention" etc. Tenet. 🙂
Freudian slip, Norsefire has a *tenancy* with MDP in exchange for CP victories to Rylde and SBR.
Really Addy?
Reducing VAT and import taxes will only give us an advantage if our weapon bonuses are the same as the other competing economy (eUS in your example) This is not the case and even at 1% VAT and import tax Canada would not be able to compete against the savings in economies of scale from a additional 60% production difference.
As for Q7 prices above bot threshol😛 increase weapon VAT to 25% then they will be below threshold and the treasury will start to cash in.
"then the taxes still brought in about 12,000-13,000 which is about a 20% increase in revenue"
EPD comment with real data confirms what is actually happening. Most VAT income comes from bot not real users.
Canadians should cross border shop and let the bot buy our products.
@Jacobi;
The bot isn't buying at eCan prices. I can't sell in eCan at eCan prices and its better for me as a producer to sell into eUS. Selling into eUS isn't good for eCan
@Mihai;
You don't get it. eUS isn't 100/100 anymore, they are 60/60 and we are 60/40, we are competing at par in food and close to par in tanks. You need volume to collect VAT, charging 25% VAT will kill the volume.
@Mihai;
EPD did not provide a complete set of date, however, neither did I.
The fact remains that as an independent producer in the pursuit of profit, I am taking my business to another country. As an eCanadian, I'm providing my micro-economics to the government so that they can consider a macro economic change. I will be collected a complete set of data and provide my work with EPD.
This is a classic price v volume scenario, will a drop in price generate enough volume to offset
As someone who gave away all his companies a year ago and now buys gold to keep up and fight, I'd rather Canadians cross border shop when appropriate,
Besides, the lowest American price at their 1% VAT is $27.40. Lowest Canadian price at 17% VAT is $29, shouldn't it be under $25 if all things were equal?
Well of course all things aren't equal, because this is erep where normal economic thought is thrown out the window by whatever deus ex admin wants to throw out.
We need a high tax because our the amount of MPPs to ensure a relatively continuous flow of battles is pretty fixed at $200,000 and we discovered when we had a disastrously low VAT in August that we wouldn't be able to afford that because of government revenue. So tax went back up and hey, we can afford it now!
As long as there is a desire to fund Military Units from government funds, there is a need for a high VAT that honestly doesn't effect price all that much. Change that policy first.
Yeah, when VAT was put down to 3% last time (only god knows why), we suffered an economic crisis in terms of gov't revenue...
If only our MU's were self sufficient....
Ahhhh, nothing gets eCanadians' panties twisted more than a discussion of taxes. Truly, it is a thing of beauty. Well trolled Addy, well trolled.
@Jacobi;
eUS:
27.40 / 101% = 27.13, net to domestic producer
27.40 / 102% = 26.86, net to eCan producer
eCan:
29.00 / 117% = 24.79, net to domestic/eCan producer
Cheaper for consumers to buy into eUS.
More profitable for eCan prodcuers to sell into eUS.
Good news for eCan, I've hired 8 employees @ $35 to make Q7 food and they are paying 35 cents each in income tax
Fail tax strategy is fail.
It's not an economy, its a revenue system.
More profitable