Chapter 464 Taxation and Administration

Chapter 465 Taxation and Administration

“Low return on investment?”

Joseph frowned slightly, does this mean he won't make money? If you start industry at the end of the 18th century and have your own advanced ideas, you won't make any money? !

Mirabeau said helplessly: "That is indeed the case, Your Highness."

With his help, Joseph found the data on the return on investment in various industries in the report. At a glance, he saw that the return on investment in most industries was between 6% and 10%.

This number would definitely be considered eye-catching in the 21st century, but right now, it is shockingly low.

You must know that the current basic interest rate on bank deposits is 6.2%. This is a figure that was lowered last year after the fiscal crisis eased slightly. It was even above 7% before.

And if you take out the money and lend it, you can easily get 10% interest.

In this case, who can be willing to invest money in industry?

When Joseph saw that the profit rate of the steel industry was only 7.9%, his face immediately darkened, he raised his eyes and looked at Mirabeau and said: "Our ironmaking industry has used a large amount of hot blast technology, and the profit should definitely exceed 20%. That’s right, what went wrong?”

He has been busy with the war in Silesia in the past few months, and he has indeed neglected to pay attention to domestic developments. I thought that with various new technologies and standardized production models, those factories should be making a lot of money, but I didn't expect that the profits were only barely better than bank deposits.

Mirabeau rubbed his hands in embarrassment and said: "Your Highness, if it is sold near the factory, the profit can indeed reach 20%, but if it is shipped to Paris or Bordeaux and other places for sale, the profit will be less than 7%."

Bayi added: "After the signing of the Treaty of the Rhine-Seine, our iron products sold to the German region have a profit of close to 10%."

Joseph heard this and said subconsciously: "Why is this..."

Before the two of them could answer, he responded: "Is it because of the local tariffs in each province?"

"Yes, Your Highness." Mirabeau nodded with a wry smile, "And the tolls from various places have eaten up a lot of the profits of the products."

Bai continued: “There are even some provinces that use goods shipped from other places as opportunities to make a fortune.

"Just like what I witnessed in Toulouse last month - the tax collector collected sales tax on a load of cloth based on the value of the goods, then stopped the car again at the next intersection and charged them another amount based on the size of the vehicle. A sales tax. Yes, with one word, there are two different taxes, passed by the Toulouse High Court.”

Speaking of unreasonable taxes and other matters, Mirabeau, as a representative of the capital aristocracy, couldn't help but complain.

Joseph frowned soon after hearing this.

At present, French industry is beginning to prosper, so tax collectors and local governments everywhere are trying every means to squeeze the last drop of oil and water from factories.

For example, in Lyon, the center of France's textile industry, the local government stipulated that all fabrics leaving the factory must reach a certain length and width before they can be transported and sold. Otherwise, they will face fines or even be burned in public.

The tax collector's tax collection team wanders around the factory every day, holding tax regulations in their hands, desperately trying to deduct places where taxes can be collected, making the factory miserable.

In fact, Joseph knew that there was something else that the two of them had not mentioned, and that was the corruption of officials. At present, there are still a large number of officials in France who were bought with money. In order to recover their "costs", these people are doing their best to be corrupt.

Although the establishment of the Impartial Investigation Bureau had a certain deterrent effect on officials, Marat's energy was limited after all. The officials used some means to make things difficult for the factory and secretly sought benefits. This kind of thing was difficult to detect.

Joseph couldn't help but rub his temples tiredly. He had previously focused all his energy on promoting technology and management progress and increasing the factory's competitiveness, but he had neglected the issue of the business environment.

The reason why Britain has become the world's largest industrial country today is that, in addition to the huge sources of raw materials and sales markets brought by its colonies, it also has the best domestic factory operating environment in Europe, which is also one of the core factors.

The UK abolished domestic local tariffs decades ago, and the tax system has also undergone several reforms, making it very transparent and reasonable.

As for the integrity of officials, although British officials were also corrupt - which was simply unavoidable in the 18th century - they were already in the best echelon compared to other countries.

These have greatly promoted the industrial development of Britain. In comparison, France is still using the officials and tax system of the feudal era to manage a country that is entering the industrial age.

If left unchecked, even with the blessing of its own advanced technology and ideas, French industry is likely to be crushed by its own tax collectors and officials...

Joseph couldn't help but sigh: "It seems that we have to carry out tax reform as soon as possible."

He silently added in his heart: There is also the reform of officialdom.

Mirabeau and Bai Yi looked at each other, and then said carefully: "Your Highness, with all due respect, even if some laws are passed to regulate taxation, those tax collectors can always find ways to circumvent..."

"You are right," Joseph nodded and said solemnly, "So, our target will be the Tax Owners Association!"

The General Association of Tax Farmers is the autonomous body of all tax farmers in France.

At present, the tax system in France is roughly like this: at the beginning of each year, the tax farmers will negotiate with the Minister of Finance to formulate a tax amount for one or more years and sign an agreement.

After that, the tax farmers in various places will directly hand over a tax amount to the French government according to the figures in the agreement, and then they can collect taxes in a certain area, and all the taxes collected belong to the tax farmers.

In other words, the French government only issues tax decrees, but does not participate in the actual tax collection at all.

The tax farmers are the ones who feed the tax collection team, and all kinds of trickery and repeated collection are endless. The people are full of complaints and hate the tax farmers. Although the taxes collected are high, the French government can only take a fixed tax, and the finances are stretched.

Mirabeau's eyes flashed with surprise when he heard this, but he immediately said cautiously: "Your Highness, our financial situation... I'm afraid it will be difficult to withstand the impact brought about by this."

What he said is also an objective fact.

At present, the bulk of France's fiscal revenue is tax. This money is collected from tax farmers at the beginning of each year, sometimes even for two or three years at a time.

If the tax farmer system is changed, the French government will face a situation where the treasury is cleared at the beginning of the year.

Although the government can collect taxes later, it will be at least a few months later. What about fiscal expenditures during this period?