Otherworld Nation Founding Chronicles - Chapter 139: Economic Reform

“Really… You had such a dream.”

“Good grief… Now I’m sleepy because of that.”

Naturally, I yawn.

I couldn’t sleep properly.

It’s the worst.

“Fairies that refer to themselves as “Ore” (Masculine Japanese Pronoun)… I understand. I’ll be careful.”

Julia nodded.

Well, I don’t think you need to get it in the meantime.

“…”

“What happened, Tetra?”

Tetra seemed to ponder for a little bit.

Her face looks serious.

“Hmm… I’m curious about that time.”

I like topics like this.

My country’s national finance is 1000 Tarlants.

The breakdown is as such.

Salt Monopoly… 400 Tarlants

Paper Monopoly… 100 Tarlants

Wine Monopoly (Distilled Liquor)… 100 Tarlants

Commercial Tax… 100 Tarlants

Land Tax… 300 Tarlants

As you can see, most of the income comes from the monopolies.

It may seem strange, but the national finance of a small country is like this.

No country is different.

The financial strength of the Rosyth clan comes from the monopoly of salt.

By the way, among these the land tax is going to decrease.

Because when sending the troops out, I promised to lower the land tax for the soldiers.

To be honest, I regret it…

But at that time, there was no other way than that response.

They just abandoned their duties, it wouldn’t have led to a rebellion.

If it was suppressed by the army, it would’ve led to a full-scale civil war.

In the first place, forcibly sending them to the battlefield wouldn’t have been useful.

The current land tax is 30%.

It’ll change to 10%.

Well, with some simple calculation, you can see that the land tax will be 100 Tarlants from now on.

200 Tarlants decrease in income…

Well, I’ll manage somehow.

By the way, spending is also a concern.

My country’s expenditure is as follows.

Infrastructure Development… 200 Tarlants

Labor Costs… 400 Tarlants

Debt Repayment… 200 Tarlants (yearly payment for 50 years)

Border Security… 100 Tarlants

And 100 Tarlants for amassing wealth

There was almost no labor cost originally, but it has increased ever since I became the King.

Bureaucrats… Because we hired the so-called civil servants.

You need money to hire people after all.

By the way, thanks to the bureaucrats, the tax collection ability has increased and the income has increased, so it does not make much sense to just fire them.

You may think the border security costs are low, but… it’s like this in the peacetime.

If there is a war, a temporary budget will be set up.

Of course, the flood control and the construction of the capital’s budgets come from the amassed wealth too.

The problem is that the amassed wealth has been completely exhausted.

It is because of flood control, the construction of the capital and the war.

It can be thought as my fault. Or rather, it is my fault.

Also due to the war, I borrowed 1000 Tarlants from a Cretian merchant.

Expenditure for debt repayment should increase.

By the way, I have not received compensation from the Kingdom of Rozel yet.

It would take time to prepare a lot of money there too.

The schedule is to receive it in 5 months.

I gave the powerful families that desired land their rewards according to their merits, but the powerful families that desired money will have to wait after I receive the compensation.

“At this stage, we are not in full-blown financial difficulties, but we need to make large-scale financial reforms in consideration of the future.”

“I agree. The flood control and the construction of the capital have not been completed yet… But what should I do? The decrease in income is going to happen for sure… Should I avoid paying the debts?”

No, that’s not wise.

It’d definitely lead to a rebellion.

Now, my public favor is at its peak.

Being at the peak means the gap is bigger when it falls.

“First of all, labor costs… The construction of a bureaucracy will be discontinued here in order to eliminate further increases.”

“Because it uses 40% of our country’s income… But then how will we get the taxes paid?”

The conventional method was to have an influential person such as the village mayor undertake tax collection.

However, there were a number of cases where they collected taxes above the actual tax rate, embezzled the difference, and underreported tax revenue.

That is why the policy up until now was to strengthen the bureaucracy and raise tax revenues.

However…

After all, it seems to be difficult in reality.

The ideal is a country with a well-developed bureaucracy like modern day Japan…

It is necessary to distinguish between the ideals and the reality.

“I’m thinking of introducing a tax collection contractor system.”

“Tax collection contractor…? What’s the difference?”

“Simply put… Until now, tax embezzlement was illegal. I’ll make it legal.”

Anyway, no matter how much you cracked down on it, embezzlement will not disappear

If so, you should allow it from the beginning and then crack down on it.

“That’s right… 5% of the collected tax can be used as their own income.”

5% is a decent amount.

It should not be a bad amount of income.

“At the same time, give the commoners the right to sue the tax collector once a year. The contractor who loses the trial gets all of their properties confiscated.”

The confiscated property will be the property of the complaining commoner.

And this is the custom of this country…

If the property is confiscated at the trial, half of the property will go into the national treasury.

This makes it harder for the contractor to cheat.

Because the commoners would keep an eye on the injustice of the contractor.

The tax will be collected whether the contractor is dishonest or not.

“Let’s use the human resources vacated by the introduction of the contractor system to collect commercial tax.”

Commercial tax is a self-assessed tax.

It is obvious, but it is not possible to follow one merchant around and confirm their profit.

We don’t have that much free time.

Although…

The merchants are in control of the tax.

This is because it is necessary to ask the government for permission when doing business inside the city.

And manage their taxes in exchange.

This can be recovered to some extent.

…However, taxes have not been collected from the merchants who wander from village to village and the markets that open on the roadsides.

Even if there isn’t any way to collect it from the wandering merchants, it is a pity that I cannot collect it from the marketplace.

From now on, I will collect taxes from here as well.

And raise the sales tax.

Until now, it was 3%, but this will be changed to 5%.

In light of my country’s economic growth, this would be appropriate.

After that, develop various industries…

The problem is that we have given the monopoly rights to paper and wine to the great families.

A new industry is needed.

I have to think about it.

And I shouldn’t forget about this…

“I want to strengthen the monopoly on salt.”

“Salt?”

The main industry of Rosyth country is rock salt.

70% of the rock salt is owned by the king, 20% by the Rosyth clan, and powerful families have gotten hold of the remaining 10%.

In addition to that, my country also obtained the rock salt of the Belvedere country.

Probably, 60 to 70% of the rock salt traded by Cretian merchants can be considered to be my country’s rock salt.

In order to bring the competition of rock salt even further down, I would like to suppress all domestic rock salt trade as a starting point.

“I want to nationalize all the rock salt that exists in the country… Prepare land and money for the powerful families and other Rosyth clans.”

“…I understand.”

As a matter of fact, 70% of the rock salt possessed by the Rosyth clan is held by Raymond.

Raymond was given possession of the salt by the former king in the past.

…It may be a little cowardly to say this after the death of the former king.

“I don’t care much. The land is fine… But what about the powerful families?”

“I will convince them.”

The powerful families in my country are the Rosyth clan, the Ars clan, and the DeBell clan.

And I am the patriarch of the Ars clan, and the DeBell clan is succumbing to me.

It’s easy to persuade them.

However…

“Do you not need land?”

“Your Majesty doesn’t want to reduce the land? … No, rather, you want to consolidate all the land under the kingship?”

…You noticed?

“If I were your Majesty, I would think like that. Your Majesty has already been recognized as king by both the Ars and DeBell clans. The people also believe in you. You no longer need the support of the Rosyth clan. In that case, it is natural to think of taking power from the Rosyth clan that’s being a hindrance in order to strengthen the royal power. The former king has also met his demise. ”

Should I say as I expected…

He really did notice it.

Perhaps the other powerful families are also aware of it?

“Don’t worry. I’m the only one that’s aware of this. The rest are… Bartolo may suspect it, but he won’t get in the way.”

“I see… Will you cooperate?”

Raymond nodded to my question.

“The flow of the times cannot be changed. The power of the commoners have strengthened, the power of the clans have weakened, and your power has grown day by day. I’m not stupid either. Just one thing, make Julia’s son the next king. If you can’t, please make it look like you got adopted by her family. If you promise me this one thing, I’ll happily help you strengthen the regal power.”

“I understand. Rest assured. I also think that making Julia’s child the next crown prince is the first priority for national stability.”

What worries me is whether or not there will be strong pressure on Julia.

Well, both Julia and I are 19 years old.

I will have a baby when I’m 20 years old.

I think it’s okay, but… I have to support her properly.

“If that is the case, we’ve reached the conclusion to our conversation. Let’s return all the tax collection rights, military rights and the land owned by the Rosyth clan to His Majesty.”

“It’s good to reach the conclusion quickly… But is that okay?”

“Do you need any conditions?”

One, to guarantee our status.

Two, paying us an official salary.

Third, taking down the private property rights of the land owned by the Rosyth clan. (Being subject to tax payment)

Four, taking over our debt.

Five, taking down our rights to take part in national politics.

“If you accept these conditions, I think it will go smoothly.”

“About debt… Is there so much of it?”

Raymond nodded.

“There are people who borrow money because of war or luxury. Because they have the right to collect taxes, it is hateful that the upper limit of borrowing is high… If your Majesty were to take over the debt, I think many powerful families would relinquish it with pleasure.”

…I also carry debt.

Three months later, the discussion with the Rosyth clan was over, and all the land owned by the Rosyth clan was returned to me.

However, the ruler of the land remains the Rosyth clan because no substitute officer or autonomous organization has been prepared.