Fu Shanhe

Chapter 475 The Minister of Revenue in a Dilemma

Time flies, and the end of the year is here in the blink of an eye.

With the influx of a large number of immigrants, the sparsely populated Annam Protectorate gradually came to life.

In particular, Yong'an Prefecture, the political center, would rank among the top ten in the Great Yu Empire.

Looking at the whole world, they are among the top metropolises.

The direct impact of economic prosperity is a sharp increase in fiscal revenue.

"Lord Wei, please give us a detailed introduction!"

Li Mu put down the report in his hand and said.

Compared to the tenth year of Yongning, the fiscal revenue of the first year of Fu'an increased by a substantial 60%.

Compared to the ninth year of Yongning, it has increased by more than three times.

This leapfrog growth was mainly a result of the integration of the newly occupied territories.

"My lord, the Protectorate's fiscal revenue in the first year of Fu'an was approximately 13.8 million taels."

Commercial taxes still accounted for the largest share, contributing 8.5 million taels of revenue.

Salt tax revenue was the largest component, contributing 4.5 million taels of tax revenue.

With the influx of immigrants and the integration of the Southeast Asian region, there is still considerable room for future growth.

Secondly, mineral revenue contributed approximately 2.3 million taels of silver.

In particular, the newly developed gold mines have very high-quality ore, contributing a large amount of profit.

If nothing unexpected happens, the Protectorate General's gold production next year is expected to exceed 80,000 taels.

Silver and copper production also increased significantly this year, reaching 50,000 jin and 1.8 million jin respectively.

The fastest growth in production was in steel, reaching 1,300 tons and over 18,000 tons respectively.

A new steel plant is under expansion.

The application of steam engines in the mining industry has already begun to be explored.

If all goes well, it will significantly improve mining efficiency, and profits are expected to increase further.

……

The growth rate of commodity transaction tax was also good, contributing 1.2 million taels of revenue.

The tea and wine taxes also grew rapidly, contributing 800,000 taels of revenue.

Luxury goods taxes, such as silk fabrics and spices, were just listed as a separate item this year, contributing approximately 100,000 taels of revenue.

The rest are miscellaneous tax revenues, which are relatively small in amount.

Starting this year, rental income from real estate and fines and confiscations will be listed separately and will not be included in commercial taxes.

These two incomes were 800,000 taels and 500,000 taels respectively.

Customs duties, the second largest source of revenue for the Protectorate General, contributed approximately 2.8 million taels this year.

Its share in fiscal revenue increased by about two percentage points.

The main issue is that the products of the Protectorate General are relatively less competitive in the international market.

The main export commodities were rice bran and charcoal, followed by timber.

Most of them are sold domestically, and very few are exported overseas.

Revenue from grain sales is classified as a special fund for immigration and is not included in fiscal revenue for the time being.

The third largest source of tax revenue for the Protectorate was seigniorage, which contributed approximately 1.2 million taels of silver.

This was mainly due to the increase in copper mine production, which created opportunities for copper coin minting.

According to the plan, a government-run money exchange will be established next year, specializing in the issuance of banknotes.

If the rollout goes smoothly, seigniorage revenue is expected to increase significantly in the future.

Wei Xinzhi answered calmly.

He was fully aware of the Protectorate's revenue.

Overall, all industries are showing steady improvement, but they also face the reality of weak product competitiveness.

The world's most profitable commodities are currently spices, silk, tea, and porcelain.

In all these areas, the Protectorate was at a disadvantage.

Even if you want to work hard, it's impossible; scarcity makes things valuable.

If people follow suit and increase production capacity, luxury goods will become cheap goods.

"The mining industry is developing rapidly, and starting next year, it will also be separated from commercial taxes."

There's no need to worry too much about the lack of competitiveness of our products; these are only temporary.

With the development of technology, our advantages in steel smelting and shipbuilding will gradually be transformed into competitive advantages.

As far as I know, the shipyard's orders are already booked for two years from now.

With the opening of the sea route in Dayu, the demand for merchant ships among the people is very strong.

After the tax exemption period for shipyards ends, the revenue generated by the shipbuilding industry alone will be a substantial sum.

High-net-worth products create value, which will be the mainstream of future global competition.

Li Mu said with a smile.

In the era of small-scale farming economy, the consumer market was mainly driven by basic needs and could not thrive.

The methods used during the European Industrial Revolution, which started with the cotton textile industry, simply wouldn't work in Dayu.

No matter how low the production cost is, it can't stop people from weaving it themselves.

Unless we break away from the small-scale farming economy and change everyone's consumption patterns, this is undoubtedly an extremely unreliable and terrible idea.

Industrialization can provide a large number of jobs, but this is conditional on the need for a large market for goods.

Historically, Europe chose to colonize other countries, and the Great Yu Dynasty could not possibly emulate that approach.

In the early days of the Industrial Revolution, Li Mu couldn't think of any industry that could absorb hundreds of millions of workers.

A crude approach, estimating that conquering the world to act as a dumping ground for goods, is barely enough to meet demand.

If the colonial model is not viable, then the only option is to gradually advance industrialization without dismantling the small-scale peasant economy.

In order to stabilize the situation, he even deliberately expanded the small-scale peasant economy as a buffer zone for the Industrial Revolution.

If there is land to support the poor and guarantee their basic livelihood, the world will not be in chaos.

"My lord, although fiscal revenue is growing rapidly, fiscal expenditure is also growing at the same pace."

If we calculate the income and expenditure of the Protectorate General, the fiscal expenditure in the first year of Fu'an reached more than 34 million taels of silver.

"If it weren't for selling grain to the north, which offset half of the expenses, even with the subsidies from Guangdong and Guangxi, we still wouldn't have been able to fill this hole."

Wei Xin replied with a bitter expression.

Being the Minister of Revenue in the Great Yu Dynasty was not easy, and being the "Minor Minister of Revenue" in the Annam Protectorate was even more difficult.

The imperial court saved its finances from collapse through tax reforms, but the Annam Protectorate was still unsure how to save its finances.

The idea of ​​levying land tax and poll tax was rejected by his own lord.

Proposals to raise the prices of salt and ironware were also rejected.

Unless the northern provinces continue to suffer from food shortages and the Protectorate can continue to reap the benefits of sky-high grain prices, the government's finances will eventually collapse.

Of course, there is also a simple mode.

If the Protectorate General were to cease its external expansion, the savings in military spending alone would reduce the annual fiscal deficit by one-third.

If immigration from within the country is stopped again, the Protectorate's finances will be revived.

Even if we don't make a profit, we can at least break even.

"Don't worry, the number of refugees can't stay this high forever."

In peaceful times, at most a few hundred thousand people would immigrate a year, which is roughly equivalent to the amount that we see in one or two months now.

Do the math: if immigration expenses were reduced by 80%, wouldn't the Protectorate's financial situation improve significantly?
As for external expansion, that period has passed its peak and will slow down in the future.

Last year's military spending was the highest point in the next few years, and future military spending will at most be half of last year's.

With the two major expenses reduced, and with the integration of the newly occupied territories, fiscal revenue will increase significantly. The Protectorate General can easily generate 20 million taels of silver in annual revenue from its current controlled areas.

As the manufacturing industry develops further, annual fiscal revenue will continue to increase.

"Reaching over 30 million taels of silver in fiscal revenue within the next five years is entirely feasible."

Li Mu immediately started making grand promises.

A world at peace is impossible.

The foundation of the Great Yu Dynasty had long been rotten. It was only through the last wave of loyal ministers forcibly pushing through reforms that the empire was given a reprieve.

If the dynasty fails to seize the opportunity to resolve internal and external troubles and achieve a revival, then it can only continue to decline.

The combination of natural and man-made disasters from the Little Ice Age makes it a truly hellish experience.

As natural disasters continue to occur in the country, the migration process will not stop.

The Protectorate's campaign in Southeast Asia has seriously impacted the interests of European colonial empires. Even if Li Mu is willing to stop, he has to see if they are willing to cooperate.

No matter how good the promises are now, the Protectorate will still have to fight if the enemy attacks.

Once the flames of war are ignited, money will be spent like water.

The Protectorate's foreign trade was not significantly affected, but the tariffs in Guangdong and Guangxi were about to be drastically reduced.

With so many unfavorable factors erupting all at once, Li Mu was afraid that revealing them would frighten his subordinates.

As for the issue of fiscal deficit, it is not the most important thing during a total war.

As long as there is enough food and supplies and enough weapons and ammunition, the war can continue.

If you don't have money, you can just go into debt to fight it.

From mining and smelting to weapons production, everything was state-owned.

When the imperial court is short of money, as long as everyone has enough to eat, production can continue.

Merchant ships and their sailors were requisitioned together; officials' salaries could be delayed; and soldiers' pay could be converted into land.

The current fiscal deficit is severe, and those are merchant ships used for transportation; the Protectorate government has to pay for them.

All strategic materials procured must be settled in gold and silver.

The salaries of all staff members must not be reduced.

"My Lord, wise!"

Upon hearing Li Mu's statement that they should cease external expansion, the civil officials immediately responded.

Like all traditional literati, they were very cautious about the issue of foreign expansion.

Expanding territory is something that should only be done occasionally.

Long-term external expansion would exceed everyone's psychological limits.

The military expenditures of the Annam Protectorate have consistently exceeded its fiscal revenues, making it a clear case of militarism and a waste of resources.

Such a high proportion of military spending would have led to countless bankruptcies if it weren't for the financial support of Guangdong and Guangxi provinces.

……

The capital city, Wenyuan Pavilion.

The Annam Protectorate was conducting its year-end accounting, and the high-ranking officials of Dayu were also doing the same.

It is necessary to not only make a final assessment of the revenue and expenditure situation of the past year, but also to prepare a budget for government spending in the coming year.

Such a momentous matter that determines the future of the empire certainly cannot involve all the officials in the discussion, otherwise the debate will continue until this time next year, and the budget will still not be ready.

Apart from the cabinet and the six ministers, everyone else was excluded.

"Why has tax revenue decreased so much this year?"

Jiang Shuhan asked, frowning.

He could accept the significant drop in fiscal revenue caused by the floods in the northern provinces.

The problem is that even the southern provinces that were not affected by the disaster have seen a decline in fiscal revenue.

This is only the second year since the tax reform was completed that fiscal revenue has declined, and for southern provinces it is the first time that revenue has declined.

"Prime Minister, the sharp decline in fiscal revenue is mainly due to natural disasters and man-made calamities."

We won't go into the details of Shuntian Prefecture, as everyone has experienced it firsthand.

The provinces of Henan and Shaanxi not only suffered from floods but also from war, so the imperial court exempted the two regions from taxes.

Other northern provinces also suffered from disasters to varying degrees, and the imperial court exempted half of the taxes.

Everyone knows this information, so there shouldn't be any doubts.

The situation becomes more complicated due to the decrease in tax revenue in the southern provinces.

According to the local governors' offices:
The natural disasters in the north disrupted the flow of goods, leading to a sharp decline in commercial tax revenue.

The outbreak of war in Southeast Asia affected import and export trade, which in turn led to a reduction in tariffs.

Revenue from land tax, salt tax, and various miscellaneous taxes decreased, and the number of laborers in the south decreased significantly due to the Annam Protectorate's immigration policies.

The Minister of Revenue, Lü Lingfeng, gave a somewhat helpless reply.

These explanations are only good for fooling idiots.

The natural disaster in the north caused prices to soar, while businesses in the southern provinces benefited.

Although the amount of goods in circulation has decreased, prices have increased several times over, resulting in a significant increase in everyone's profits.

Commercial tax revenue, which should have increased, actually decreased.

The claim that the Nanyang Wars affected tariffs is also nonsense.

Li Mu's military expeditions to Southeast Asia targeted indigenous peoples, and the wars primarily took place on land.

There was never a large-scale naval battle, nor was the smooth flow of shipping routes affected.

The number of merchant ships indicates that overseas trade remains active.

The reasons given for the decrease in land tax, salt tax, and various miscellaneous taxes were even more outrageous.

The Annam Protectorate has always focused its immigration efforts on the north, with very few immigration settlements in the south.

Influenced by their attachment to their homeland, people would never choose to emigrate overseas unless they went bankrupt and became refugees.

If we were to actually count the population, the population of the southern provinces has definitely been growing steadily in recent years.

The previous wars led to a decrease in the number of gentry in the South, which to some extent alleviated social conflicts.

With increased land resources per capita, people's lives improved, and naturally, they began to reproduce.

The population decline caused by the White Lotus Rebellion is rapidly recovering.

"Bastard!"

"Such an absurd reason, didn't your Ministry of Revenue verify it?"

The Marquis of Zhendong couldn't help but slam his fist on the table and questioned him.

Decreasing tax revenue is not a good sign.

If this problem cannot be solved, the political achievements of the reforms made by the aristocratic faction will soon be destroyed.

The biggest reason why Jing and Li were able to rise to high positions was their remarkable achievements in reform.

As inheritors of political resources, they naturally want to protect these achievements.

"My lord, please calm down. The Ministry of Revenue has already sent people to investigate."

However, the situation in the southern provinces is complex, and it's unlikely that significant progress will be made in the short term.

Lu Lingfeng forced himself to explain.

His situation was extremely awkward at that moment.

As the Minister of Revenue, he should have stood on the side of the imperial court and urged local authorities to collect taxes in accordance with regulations.

Ironically, the region with the largest decrease in tax revenue happened to be the stronghold of the Qingliu Party.

If we investigate further, the blame will most likely fall on our own people.

When the interests of the political party clashed with those of the imperial court, he, the unfortunate man standing in the middle, was also pushed to the center of the storm.

(End of this chapter)