Ming Dynasty: I risked my life to teach the prince, the emperor begged me not to die

Chapter 252 Business Enriches the Country
Zhu Houzhao had no other intention, he just wanted to disgust the Minister of Revenue Qin Hong.

So I took the trouble to talk to you so much, but you didn't even show any actual gratitude. You just talk nonsense, right?

Isn't this too much of a shame?!

Qin Hong was a little embarrassed and said to Chen Ce, "I will ask for credit for you when I return."

Chen Ce shook his head and said, "Don't listen to his nonsense. I was just chatting with you."

Zhu Houzhao said to Chen Ce: "Don't be polite to him. Was he polite to you when he arrested you?"

Qin Hong: “…”

Your Highness, why are you so disloyal? I am a minister of your Zhu family, so naturally I am thinking about the best interests of your Ming Dynasty. It would be fine if you don't speak for me, but why are you helping outsiders?

Besides, the Ministry of Revenue didn't arrest him. The head of the Ministry of Revenue only summoned him to the Ministry but didn't put him in jail. Even if we take a step back, hasn't the head of the Ministry of Revenue, Liu Yizhi, been demoted to the Local Taxation Bureau now?
"Mr. Chen, I'm really sorry. The Ministry of Revenue didn't do it on purpose. Please forgive me."

"The Ministry of Revenue's team is indeed mixed, and this is undeniably the Ministry's fault."

Chen Ce shook his head slightly and said to Qin Hong: "Don't blame the Ministry of Revenue. It's the entire national policy that caused it. The scholars and officials have never really understood business, nor have they seen the huge potential of business. Otherwise, the Ministry of Revenue wouldn't be so strapped for cash."

Qin Hong frowned slightly. It was obvious that Chen Ce's ideas were contrary to his. However, Qin Hong was not a pedantic scholar. He still patiently asked Chen Ce, "Mr. Chen, what do you mean by this?"

Chen Ce said to Qin Hong: "Although I don't know the financial revenue of the Ming Dynasty, I think the main source of tax revenue for the Ministry of Revenue is from farmland. As for commercial tax revenue, it only accounts for a small part, and it is still a very small part."

Qin Hong said: "Isn't this normal? The business itself doesn't have much potential, so how much can be collected?"

Since the Hongwu period, the Ming Dynasty has always emphasized agriculture and suppressed commerce. This was understandable in the early days of the country. The first need at that time must have been to fill the stomach, and it was true that encouraging farming was the basic national policy.

As time went on, by the middle of the Ming Dynasty, there were not many people who were truly starving, but the finances of the Ministry of Revenue of the imperial court were still not optimistic. Land annexation was only part of it; the low or non-collection of commercial taxes was the most serious problem.

No one has ever truly realized the potential of Ming Dynasty's commerce.

This phenomenon is actually normal. The commercial tax and agricultural tax of the Ming Dynasty are different. Agricultural tax has fixed assets. The land is there, and the annual harvest can be accurately measured.

But business is different. The commercial tax of the Ming Dynasty is actually the business tax. It is not a tax levied on merchants based on their profits, but a business tax levied based on the actual income during the operation process.

This will lead to a very serious problem. Many businessmen do not make any money at all, but because they generate income, they still have to pay for this income.

This will make many businessmen feel unbalanced, as they have to pay taxes even though they are clearly making losses. In the end, they begin to resist and evade taxation.

As for those big businessmen who actually generated profits, they had ways to conceal their income during the business operations, resulting in the court being unable to find out their income and unable to collect much money.

Over time, the Ming government had a fixed impression of commercial tax. They thought that since they could not collect much money anyway, why waste a lot of manpower and resources to collect this tax? As time went by, the local taxation bureaus turned a blind eye, and it was normal that they could not collect any money from commercial tax.

When Chen Ce finished his analysis, Qin Hong said, "But it is almost impossible to achieve the fair collection you mentioned."

Chen Ce shook his head and said, "Why not? Can't we just collect taxes based on profits?" "During the business process, as long as we make a profit, we can collect taxes based on the profits. This way, merchants who lose money don't need to pay taxes, and merchants who make profits pay taxes to the country. This way, merchants from all walks of life will feel balanced and will no longer resist the court's collection of business taxes."

Qin Hong was stunned for a while, staring at Chen Ce blankly, and soon asked: "This is still impossible. How can the tax department find out whether someone is profitable?"

“Businessmen can report losses even if they make profits. It is impossible to expect morality to constrain their behavior unless everyone is as self-conscious as a saint.”

"But is this possible?"

Chen Ce said: "It's impossible, but it can be achieved."

"How to achieve it?" Qin Hong asked hurriedly.

Chen Ce replied: "So-called profit is nothing more than the addition and subtraction of revenue, cost, expenses and expenditure."

"If we determine these sub-items, we can get the profit."

Qin Hong was a little confused and felt that he could hardly keep up with Chen Ce's thinking. He was the Minister of Revenue and was confident that he was familiar with financial issues, but Chen Ce's ideas were too advanced and he could hardly keep up with Chen Ce's thinking.

Chen Ce said: "For example, income, to determine income, it is necessary to record it based on funds, so merchants need to set up a separate fund account book to specifically determine fund income and expenditure."

"The types of funds entering the account are nothing more than loans, operating income, etc., which can be checked in the account books."

Qin Hong asked: "What about the cost expenditure?"

"How to check?"

Chen Ce said: "Invoices, let's take a simple example. A construction merchant needs to buy sand, stone and wood. These are costs. During the purchase process, the downstream merchant issues receipts to the upstream merchant. These receipts can be used as proof of cost."

After Qin Hong listened to it, he savored it carefully, his eyes suddenly brightened, and he said in a serious tone: "That's the truth!"

Chen Ce nodded: "If you want to collect more business taxes, you need to regulate the code of conduct of merchants and the various income, expenses and costs in the financial process."

"Of course, this is not something that can be accomplished overnight, but as long as we keep doing it, no one can predict how much potential the business can unleash and how much tax revenue it can help the court increase."

"If you do nothing because you are afraid of making mistakes and getting into trouble, then business will never flourish. Prosperous business not only brings in fiscal revenue, but also solves the survival problems of a large number of refugees, because merchants need to be employed."

Chen Ce looked at Qin Hong and asked, "I wonder if you can understand what I said, sir?"

"I suggest that if you have the power, you should try it out on a trial basis, compare it and see if it is profitable for a year or half a year before making a final conclusion, rather than just saying that the business has no potential and is not profitable without any evidence."

"The country is developing, and standing still is never a good thing for governing a country. What do you think, sir?"

Qin Hong stared at Chen Ce blankly. He saw the determination to make progress in Chen Ce, but this was not something he should worry about. He was just an ordinary person, wasn't he?
Why were his words so profound that even Qin Hong, the Minister of Revenue, felt ashamed of himself?
Yes, being complacent is never a good thing for governing a country... Why not try to embrace business... Isn't this what he, the Minister of Revenue, should do for the Ming Dynasty?
You didn’t do it before because you didn’t think about it or expect it, but now people have paved the way for you.

(End of this chapter)