Life of Being a Crown Prince in France-Chapter 644 - 553: Lottery, Tax Reduction, There’s Always Something for You
Chapter 644: Chapter 553: Lottery, Tax Reduction, There’s Always Something for You
Joseph continued, “And when the seller is purchasing raw materials, they must also obtain a document proving the price from the supplier.
“Oh, there is a name for such a document—it’s called an ‘invoice’.
“When a factory or shop issues an invoice, they must do so in duplicate—one copy goes to the buyer, one copy is retained.
“In this way, tax officers can simply learn about the sales situation based on the seller’s retained invoices and determine the amount of value-added tax due, depending on the corresponding purchase price—which can also be seen on their purchase invoices.”
Robespierre’s mind raced, as he blurted out, “Your Highness, what if the seller hides the copies of their sales invoices?”
Joseph replied at a leisurely pace, “Invoices must be obtained from the tax office by the merchants, and each invoice is numbered. The quantities and numbers obtained are both recorded. If they issue an invoice to the buyer, there must be a corresponding retained copy. Otherwise, there would be missing invoice numbers in the invoice book, in which case the tax office could impose a fine—sure to be much higher than the value-added tax.”
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Robespierre nodded his realization, then immediately asked, “Your Highness, then how do we ensure that shops or factories will definitely ask sellers for invoices when they purchase goods?”
Before Joseph could speak, Fulco beside him, with a “you-don’t-know-this?” expression, said, “Without a purchase invoice, the input cost will be calculated based on the market’s lowest price, and the shop will end up paying extremely high value-added tax.
“Even, they can be penalized under suspicion of smuggling.”
Robespierre’s eyes brightened, “Just as Your Highness said, this tax method will enable buyers to monitor sellers, and tax officers only need to check the invoice books to prevent tax evasion.”
He was speaking when he suddenly saw another “blind spot” and looked at Joseph, “Your Highness, however, for the final purchasers of goods, such as farmers, there is no need for an invoice.
“Therefore, they have no incentive to ask for one, and if they don’t ask for an invoice when buying things, the shop’s invoice book will have no record…”
“You’ve noticed a very important issue,” Joseph nodded.
In fact, ordinary people not asking for invoices is also a headache for the tax department in the 21st century. Many businesses thus underreport their taxes.
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However, it was precisely because of this that tax departments in future generations came up with many countermeasures.
“We can use some methods to encourage people to ask for invoices,” Joseph said with a smile. “For instance, when all government departments and employees make expense claims, they must base it on invoices. No reimbursement without an invoice.”
Government expenses are no small sum, and government officials taking the lead in asking for invoices can also guide French society.
“Secondly, we can organize invoice lotteries. Every used invoice number gets a chance in the lottery, which the tax office will announce monthly. The prize amount does not need to be very large, three sous to one franc would be sufficient; the key is that there should be a large number of winners. If we award 100,000 winners each month, totaling a reward sum of 10,000 to 20,000 francs, it would attract many people to ask for invoices.”
The effectiveness of invoice lotteries wasn’t very significant in the 21st century, mainly because people in that era lived life at a much faster pace, and everyone was too lazy to waste time and to keep track of their invoices.
But in the 18th century, there was an abundance of time. For the chance at a few sous’ reward, plenty of people would be willing to ‘hassle’ sellers. Furthermore, preserving invoices was one of the basic responsibilities of a housewife of the era.
Joseph continued, “Furthermore, the tax office can implement policies, so ordinary people can also deduct their personal taxes with invoices. The more they shop, the less tax they pay, which can also stimulate commerce.
“Of course, a limit must be set, such as a maximum of three francs per person per month to prevent the wealthy from using this to evade taxes.”
Robespierre and Fulco both nodded repeatedly. The French commoners would frantically ask for invoices even if they could save just three sous in taxes, let alone three francs.
Yet the Crown Prince showed no signs of stopping, “Lastly, and most importantly, is a measure of public advocacy.
“We need to make ordinary people understand the importance of asking for invoices.
“Not to say that the invoice is a guarantee of national taxation or anything like that, but to directly tell them that by asking for invoices, they can avoid rich factory owners and shopkeepers from evading taxes. If the wealthy evade a lot of taxes, then the government will have to raise tax rates to ensure fiscal stability. Then ordinary people will have to pay more taxes.”
Both tax officials at this time had the same thought—the Crown Prince truly had a deep understanding of human nature.
Ordinary people often harbored some resentment towards the rich. If it’s not for the opportunity to reduce their own taxes, but for the chance to make the rich pay more, they would definitely be very proactive in doing so.
With such a series of measures, France would soon be swept up in a craze for asking for invoices.
Robespierre exclaimed excitedly, “Your Highness’s value-added tax plan is simply perfect! From now on, tax officers only need to focus on invoices to prevent most tax evasion.”
Fulco nodded in agreement, “And it can be foreseen that the number of tax officers needed will be reduced. The tax office is currently short-staffed; this could solve a big problem!”
In the following days, Joseph and the senior officials of the tax office discussed in detail the implementation plan for value-added tax and the invoice system, later including Denico, the editor-in-chief of the “Paris Commercial News”.
As the month drew to a close, with the “Paris Commercial News” publishing a front-page story “Shocking! They are quietly devouring your purse, what can you do?” the tax office announced the plan to change from goods tax to value-added tax with incredible efficiency.
The Paris Royal Mint also cooperated fully, ensuring that all invoice printing work could be completed within a month.
Subsequently, long queues formed in front of tax offices all over France, launching a fever for obtaining invoice books.
Unexpectedly to Joseph, even before the value-added tax took effect, the national treasury gained a substantial income—just in less than half a month, the national tax offices collected up to 3.2 million francs simply from the fee for the invoice books.
Meanwhile, Robespierre’s initial plan to increase training for tax officers was not delayed, with all tax offices training for an hour and a half every day. And at Joseph’s request, officials from the Official Investigation Bureau were also invited to give lectures in tax offices from time to time.
…
The western part of the Baltic Sea.
Kattegat Strait.
Even with only half sails hoisted, the fourth-rate battleship of the Royal Navy of England, “Polyphemus,” still moved at an impressive speed, aided by the ocean currents.
Based on their current speed, they would arrive at their destination, Riga Port, within three days.
In the senior officers’ dining room, Lord Grenville, the British Foreign Minister, smiled at the Duke of Leeds sitting across from him as he looked down at his plate, “You don’t have to endure this terrible food after tomorrow, I envy you.”
