284 Currency and Taxation (1/2)

After he gained Ouyang Shuo's approval, Meng Zhida started to describe his plan.

What was most important was to set up a banknote printing bureau in the main branch of Four Seas bank to be in charge of the printing of banknotes.

The planned banknotes included 10 gold, 20 gold, 50 gold and 100 gold. There would be no copper or silver banknotes, and no numbers less than 10 gold.

Based on Meng Zhida's thoughts, the banknotes would be a higher class currency and be mainly used for the buying and selling of goods. As for the daily expenses, they would still be done with copper, silver, and gold coins.

What Ouyang Shuo needed to do was to purchase the

and the

, paper workshop and printing workshop blueprints.

Luckily, Yingyu had to discuss with the Cui Chamber of Commerce about setting up a branch in Shanhai City, so Ouyang Shuo just passed her the responsibility of acquisition all to her. He also asked her to recruit some experienced artisans through the Cui Chamber of Commerce.

Making use of this opportunity, Yingyu raised the topic about changing the finances and taxes. ”As the economy grows past its infancy and starts to prosper, the tax rate set up during the start of privatisation isn't suitable. The Financial Department feels that the time has come for us to raise taxes.”

Ouyang Shuo remained silent. When he had set the tax rate to be 1/30, his goal was to motivate craftsmen and commerce to nurture the economy.

This proved that his original idea was right. Under the low tax and low interest rate loans from the Four Seas bank, privatisation had been blooming, and the territory tax returns had been increasing by the day.

However as Yingyu had mentioned, since their goal had already been reached, to adjust the tax rate to a normal level was needed. If not, as the territory's economy bloomed, the finances of the territory wouldn't benefit. Increasing the tax rates and financial profits wasn't to earn more gold, but to give them the funds to do better projects and for the public benefit.

”What level does the Financial Department feel that the tax rates should be adjusted to?” Ouyang Shuo asked.

”5%.”

”5%? This is the final answer of the Financial Department?”

”No, the most suitable rate would be 1/15, only...” Yingyu was a bit hesitant.

”Just that what?”

”The Financial Department is afraid that if we raise it so quickly, the people will be unhappy.”

Ouyang Shuo shook his head. ”The tax rate is an important part of the administration. We can't keep changing it and have to maintain it at a stable level. Since we need to change it, we must do it once and for all. There will probably be a little pressure, but we still have to get over it.”

”Understood.” With Ouyang Shuo's support, Yingyu would have more backing to push for this. ”Apart from taxes, there's also the income of the affiliate territories. The Financial Department feels that the affiliate territories should give us 70% of their tax, and then the lord's manor will assign and deal with it.”

Ouyang Shuo frowned. Financial matters wasn't an independent body, and must be done together with administrative matters.

”Let the Financial Department consider the economy advisor's views, and give me a full tax change report. After the territory upgrades, then we will discuss the exact measures.” Ouyang Shuo postponed the suggestion from the Financial Department.

”Ok!” Cui Yingyu was a little demoralized.

Over the next few days, Shanhai City started to get busy for their upgrade quests.

The first one to have progress was the 2nd quest. After Shanhai City and the Cui Chamber of Commerce discussed, they agreed to set up a branch and buy up Shanhai City products: seafood and salt from Beihai City, tea and herbs from Qiushui City, fur and skin from Friendship City, wood from Gushan City, etc.

At the same time, the Cui Chamber of Commerce also set up a shop in Shanhai City selling rare items like chinaware, spices, jade decorations, etc.

The setting up of the Chamber of Commerce would be able to stimulate exports and also increase the sources of imports, improving the sales structure and improving the economy.

Apart from that, the Cui Family bank was also attracted to Shanhai City to compete with the Four Seas Bank. If the loans from the Four Seas Bank were for daily life, then the Cui Family bank were purely for investment.

Be it the pottery factory or the Xila Lake pearl culturing base, they all became the investment targets of the Cui Family bank.

All these workshops that were invested in all welcomed a huge change.

Toward these outside investments, Ouyang Shuo accepted all of them. Of course, the industries and businesses controlled by the Financial Department were not included.

For the next step, Ouyang Shuo planned to put down the minefields and the logging camps and list them as investable items, leaving the Material Reserves Department with strategic resources like copper, iron and gold mines.

All this was done to shape the economy of the territory.

What the Cui Chamber of Commerce brought over wasn't only products and funds, but also large amounts of artisans and craftsmen. In the business street, they built up a grand restaurant- Shanhai Garden.