Chapter 152: Chapter 152 Tax Reforms

"Mayor, I must say, your accounting is exceptionally well-done!" The investigator from the State Tax Bureau closed the ledger in his hands and removed his glasses, closing his eyes in exhaustion. Piled beside him were stacks of ledgers, all of which he had already reviewed. He'd spent three days skimming through every ledger, and he had to admit, the tax records in Ternell City were "crafted" to near perfection—a seasoned hand had done the work.Opening any ledger, one would find only small sums of a few cents or at most a few dollars. Occasionally, there were one or two larger tax entries, which would ultimately be proven as "marginal profit" or "charitable contributions." Under the Empire's tax system, neither of these categories incurs any tax.

"Marginal profit" refers to low-profit trades within the Empire's prescribed commercial activities, mostly essential goods like wheat or beef. The government has set standardized wholesale and retail prices, unaffected by market fluctuations. Coupled with the existence of "grain protection zones" and "livestock protection zones," the Empire exempts these low-profit trades from taxation.

Charitable tax exemptions are equally straightforward. The recent charity gala raised over forty thousand dollars in donations, intended directly for impoverished citizens needing aid. However, to prevent corruption and embezzlement, the Empire mandates that all charitable funds be distributed as supplies rather than cash to the recipients.

For instance, donations might be used to purchase food, clothing, or various essentials, which are then distributed. This minimizes the greed that large sums of money could incite and prevents gangs or organizations from reclaiming the funds from impoverished citizens. Supplies purchased with charitable funds are for charitable purposes, thus also exempt from taxes.

This may explain why, in Old Party-controlled areas, there is nearly monthly charitable giving. They use this method to legally and reasonably conceal tax issues.

The mayor sitting nearby chuckled, though it was unclear if he agreed with the investigator's assessment or dismissed it.

The investigator shook his head, chuckling. He took a handkerchief from his pocket to clean his glasses, carefully placing them back in his pocket before looking at Peter. "Mayor, in this world, nothing is foolproof or perfect. As a state tax official, I've examined more ledgers than Ternell City has had in a hundred years. Find one error, and the entire accounting will collapse naturally."

He returned the ledger to the table, took a sip of his now-cold coffee. "Perhaps you're unaware, but during the upcoming midterm election, a new law will be announced. The tax reform proposal has passed the Imperial Parliament and is about to take effect across the Empire."

"The more realistic your forgeries, the harder the fall will be."

Peter's eyebrow twitched; he genuinely hadn't known the tax reform had already passed. He'd heard there was a plan to switch from voluntary reporting to mandatory reporting. Currently, stores record the price, type, and other information for each item sold, then submit this ledger to the tax office at the end of the month.

The tax office reviews every entry and calculates a total tax amount, which they then collect in the first week of the following month.

At its core, the current tax collection method relies entirely on merchants' honesty. But are merchants truly that conscientious?

Impossible!

Many merchants record only a fraction of their sales, reducing their tax burden. Take, for example, a bakery in town. They sell between twenty to thirty dollars of bread daily, sometimes more, but their ledger only reports two or three dollars in sales. With business tax thresholds in place, they owe just five cents in tax daily, or ten cents on a high day.

In a month, that's only three dollars!

But after the reform, everything will change. Simply put, it will be a semi-compulsory tax. Taxation for each business will be based on its operational nature and the number of employees. For example, take that same bakery and classify it as "food processing and retail," setting a tax standard of three dollars.

For every employee the bakery hires, the monthly tax increases by three dollars. If the bakery employs seven people, including the owner, it would owe twenty-four dollars in tax each month. The tax office wouldn't care about how much bread it sells or profits it makes; that's the tax. If the business isn't profitable, the owner could simply hire fewer employees, perhaps just two bakers and the owner, reducing the monthly tax to nine dollars.

Each business must strictly register its employee count and business type, with no room for error. These records will be kept by the tax office for future inspections.

Of course, issues may arise. For instance, if an owner only hires two bakers but has family members like his wife or children helping with sales, he would only report nine dollars in tax each month. While permissible, the tax office will conduct random inspections. If caught engaging in such practices, the owner will owe thirty dollars per person per month as back taxes, covering up to one year.

A penalty of 120 times could bankrupt some small and medium businesses with just one offense.

But that's the law; when the law's purpose is to protect its own interests, there's no room for leniency.

Some in the Imperial Parliament pointed out the severe problems with such a heavy-handed tax approach, noting that small struggling businesses might go bankrupt. But to the bigwigs, a few small businesses failing means nothing compared to the Empire's treasury.

Peter said nothing, only maintaining a smile, though his gaze hinted at disdain. Perhaps the New Party could only devise such blunt measures to raise national revenue, highlighting their lack of governance skills. Even if Ternell City's tax revenue increased, it wouldn't affect him—it would be the local tax officials' fault and the fault of those deceitful merchants.

Standing up, he sighed, "Well, I'll let you continue your work. I hope you find the 'key error' you mentioned soon. I wish you success in advance. I have other matters to attend to. Goodbye!" He stepped forward, shook hands with the investigator, nodded, and turned to leave with his coat and hat. He wasn't worried about the ledgers. Every year, he spent a fortune hiring top professionals to handle this—why else would he invest in them?

Once outside, the mayor's expression darkened, no longer as carefree as he had seemed inside. The local tax official followed closely behind him. "Keep a close watch on him. Inform me immediately if anything happens. And if things get too serious…" He paused, glancing back at the tax official, his cold stare making the official shudder.

The official gritted his teeth and nodded. Only then did the mayor pat him on the shoulder and get into his car.

If that investigator truly found any loopholes, they'd have to silence him.

The Old Party had done such things more than once. Every year, vast sums of tax money, after being concealed, were siphoned off to the higher-ups. If an issue arose, many officials could lose their positions. Peter had no choice but to be cautious and ruthless.

Once seated in the car, he closed his eyes, finally asking after a while, "Have they found that man, Jon?"

The driver replied while driving, "Not yet, but they're close. Some people are already watching near the police station. They're just waiting for someone to make the first move."

Satisfied, Peter fell silent. He knew that no one could resist the lure of a bounty. So far, no one had come forward to identify "Jon," not out of loyalty but from fear of retaliation. This also told Peter one thing—"Jon" had someone behind him, someone with enough influence to intimidate those in the know.

...

"You're saying he's a half-blood?" S~eaʀᴄh the NôvelFire(.)net website on Google to access chapters of novels early and in the highest quality.

Julian looked at Dave in surprise. The car wash worker was of mixed heritage, born to a Provian father and a Guar mother. In this society, women held low status, and in families like these, Guar customs were suppressed to the extreme. The car wash worker likely had no idea how his actions would be judged.

Dave shrugged. There was no consensus on whether half-bloods deserved the judgment of the gods or the First King, so ultimately, the choice fell to Julian once more.