Flame Kingdom – 10

Four months had passed since Kota came.

“… I cannot believe it.”

Rondo de Terra lord residence’s reception room Although it was called the “reception room”, for Erika it was just like an empty huge hall. It was a room where it could hold a grand dance party… Erika peeked inside in bad manners.

“Is that so?”

“Sure is…”

At least for her. Erika never saw this room had so many people inside it like this, despite being the person who lives in the building.

“Merchant is a creature that is always open wake whenever there’s an interest. They don’t feel attached to one place where there was no profit, the moment they sense profit they will sense it and come running to it.”

It was a dream for a merchant to have a branch office, which also serves as double profit for them. It satisfied the merchant’s pride, since having two shops was proof that they were successful merchants, and having two shops meant an increase in sales.

“… Is that how it works?”

Erika seems to be unable to understand that. No matter how she thought of it, this was Terra. In her head, was there even a reason for them to open a shop here?

“it tends to be misunderstood but, the increase in sales and the increase in profits are two completely different things. Rather than creating a new shop, an increase in sales easily could be done by increasing the people who handle the goods and the salesperson itself.”

The question was whether or not by doing that the increase in profit would be fulfilled.

“In this town, they won’t have to pay tax expense for opening a branch office. With that alone, it would be easier for them to open a new shop, no?”

A place where you can get it for free, or a place where you have to pay. If the latter didn’t have much appeal, then usually people would think to open a store in the former.

“But, they still need to pay taxes no?”

“Fixed cost and variable cost are different, you know?”

Variable expenses were those expense that would increase depending on the sales, while fixed costs go out on a regular basis ignoring whether the sales had increased or not. Although it was vague which one was ‘better’, but since no one knew whether or not the new shop would generate profit, if they could decrease the fixed cost, the chance for profit would also increase. When it comes to open a new shop, it was actually quite a gamble.

“Now then… Shall we start?”

Rather than standing here all the time, Kota urged Erika to enter the room.

————————————————————————

“Everyone thank you for gathering here. My name is Kota Matsushiro, from Yameto, and also the one who responsible for the new plan here in Terra. In the future, I will be the contact person for all of you, pleased to meet you.”

In total there were 30 people. The merchants were sitting on their chairs, after bowing toward them, Kota also sat on his chair facing them.

“I want us to go straight to the point, but since I believe all of you want to confirm the requirement and have some question, I will listen to them and answer them as best as I could, but since we only have limited time, please do be clear and short.”

There was no hesitation, Kota spoke smoothly while paying a glance at the paper in his hand. Erika who sat beside him was tense and rendered silent, as for Kota he was used to company presentation where he speaks in front of a lot of people, thinking that, he manages to relax himself. –

“First let us confirm the requirement. You need to pay a deposit of 10,000 white gold coins to open a branch office. This is not a tax collection, it is more like ‘security deposit’. There are two points in regard to that. One is to leave the 10,000 white gold coins with us at least for ten years. And at the end of the ten years, we will return the 10,000 white gold coins along with 100 white gold coins as an extra. The second point would be, we will prepare the shops/office free of charge, but in case of a serious incident, for example, in an event where a fire broke out, we will repair them by using this 10,000 white gold coins. Ah, please don’t worry. Even if everything is burned to the ground, we’re not using such a luxurious shop/office, so it won’t cost 10,000 white gold coins.”

Hearing Kota’s last remark, little laughter came out from the attendance.

“After ten years had passed, for us to return the 10,000 white gold coins, you need to hand over the deposit certificate. We will only issue this certificate once, and we won’t reissue the certificate even if it was lost, also we won’t respond to any demand without the certificate, thus I should warn all of you to keep it safe. We will sell some safe if you want, please do order it if you need one. I won’t be angry if you drop a little bit of money on us, I promise there won’t be any punishment?”

A little bigger laughter happens.

“Next is regarding tax. As you know, we do not receive any tax from opening the office or shop here. In other words, you don’t have to pay tax if you just open a store.”

Which make it more meaningful for them to open branch store here.

“We will take a yearly profit taxes from each branch. Remember, not sales, but profit. I will take 20% of the profit as taxes. Which means, if you make 100 white gold coins as a profit in one year, then I will take 20 white gold coins as the tax. ”

Saying that Kota takes out one document from his hand.

“Although it is a simple one, we’ve prepared some document for all of you to fill in regards to annual accounts here. Please write down the previous year’s sales and expense during the first two months of each year.”

Many people then raised their hands, but the moment Kota said “We will answer a question last”, everyone pulled down their hands. Seeing that move, Kota then continue talking.

“Well then next. Just now we talk about the tax, now we’re going to talk about the tax relief. If you hire Terra residence as your worker, we will reduce the tax by 20%. The specific detail is written in the separate paper, please refer to there.”

After saying that, Kota took his cup of tea and drink it. After talking that much, he felt his throat hurt.

“… Was my explanation clear enough? Also, although it is obvious since it was written on the paper given to all of you, remember you should not disturb the law. Now then, are there any questions?”

The moment Kota ended his speech, one person in the middle of the room raised his hand.

“Go ahead and speak.”

“… Excuse me. I’m Clark working for Sandria Firm. I heard that we need to submit annual accounts earlier… Is it absolutely necessary to do that?”

“Yes, it is.”

“For example, we at Sandria firm, there is an account document which common to all store, where we list our income and expenditure and report it to the head office. Can we use that?”

“Since tax return document needs sales and expense listed in detail, as long there’s that, it is fine. Although I said that, we would suggest that you could follow our format instead. ”

“… I see. ”

“Ah, also, we will check the documents all of you submitted. If you misrepresenting the sales or profit amount… In other words, if you make a false declaration, we will increase the tax rate as punishment. This has nothing to do with malicious intent. Even if you’re being careless and unintentionally make a mistake, we won’t accept that as an excuse. If you have your own style, then you may use your style. However, please remember that we will be tough when it come to checking it.”

“… I understood. We will make the report as reliable as possible.”

“Thank you.”

After Clark took a seat, another man stood up.

“Everyone could make an unintentional mistake, are you still not going to overlook it? Ah, my name is Rain from Mizugard commerce union.”

“Then Rain-san, as you said, every human might make an unintentional mistake. But are you going to just forgive and forget if one of your partner delayed their delivery of goods? I’m sorry but I don’t want to deal any business with that kind of people.”

“That’s true… But…”

“… But I do aware that we’re forcing you to do an unfamiliar task. Thus, when you submit the document during the first two months each year, I will also ask question to confirm the content. If there’s a problem, we could fix it there. When that happen, the tax rate would stay the same and we won’t give any punishment.”

Rain nodded his head after Kota give his statement.

“I have another question. I heard that you will lend land and buildings, but what about the location condition?”

“Please elaborate more?”

“This is not a complaint, but I was worried about the fairness when it comes to allocated land. How are you going to deal with this?”

“Let see, I would like to say first come first served, but we decided to do it by using lottery. Ah, if you all agreed to it, I could create a policy where those who give more deposit than 10,000 white gold coins will be given priority?”

“… Please use the lottery instead.”

“Let us do that then. For the time being, I’ve marked the commercial area. We will try our best to reduce the sense of unfairness regarding the location.”

We’ve prepared a vast land near the harbor. Although it was expensive and time-consuming to ask everyone to evacuate, but since it was an unattractive land where crops were hard to grow, unexpectedly everyone happily move out. – Originally I thought it would take around at least half a year for the negotiation to complete, but thanks to this we got the land and the buildings ready just within 4 months. As for the cost, we used the money we got from selling the emergency assets.

“Also, if you felt the land we prepared insufficient, you may use land outside the commercial area we’ve prepared. However, you will shoulder the cost by yourself and we won’t provide any incentive. But we will prepare the carpenter as the bare minimum.”

Hearing Kota’s explanation, not just Rain, but everyone nodded their head.

“… Do you have any other question?”

“Emm…”

When Kota thought about to end the meeting, someone raised a voice. A beautiful woman with short black hair raised her hand while looking apologetically.

“Yes?”

“Please excuse me. I-I have a question, my name is Maria from Search firm. Emmm, when we handed over 10,000 white gold coins, why are we being given deposit certificate?”

“I see. Do you have unclear point regarding that?”

“No, rather than unclear… It’s deposit certificate, right? Not under custody certificate?”

“… That’s right.”

“If that the case then… For example, if Rain-san brought my deposit certificate with him would you hand over the money to him?”

“Of course.”

Maria then silent for a moment as if to think about something.

“… Emm, if possible I would like consultation but…”

She said that while looking troubled then continue.

“Could you make the certificate by division? For example, 1,000 white gold coin certificate, 100 white gold coins, so on and so forth, instead of a whole 10,000 white gold coins certificate.”

Kota smiled hearing Maria’s words.

“… Maria from Search Firm right? Let us discuss this in detail later, could you come to us again later?”

Economic Knowledge 5

Tax audit.

The infamous fearsome taxwoman, the moment they speak “this needs further investigation” it would cause anyone to tremble in fear. Tax investigation is a serious matter. One wrong move and economic sanction might befall you. – If possible anyone wanted to pay their taxes properly, but you know~…