The next morning, Chu Chen, who did not have to attend the morning court, still diligently went to the administrative office to handle official business.
While handling official duties, he waited. After half an hour, Chu Chen summoned five of the six ministers, the missing one still being in the death row.
"Greetings, Prime Minister Chu!"
"Yes, you are dismissed."
Chu Chen raised his hands in a gesture of dismissal and then signaled everyone to be seated.
After everyone had taken their seats on both sides, he began to speak, "I said some time ago that the imperial court is now terminally ill, and only by holding firm to the determination to reform can it be saved. Only when the imperial court improves can your prosperity and wealth continue."
Chu Chen paused here, a half-smile on his face, and said, "But after I announced it, I took no action. The people below all thought that I was just talking to please His Majesty and did not actually intend to reform. But!"
With a "but," the hearts of Sun Mo, Minister of Personnel, Xie An, Minister of War, Wang Zhe, Minister of Justice, Meng Yuan, Minister of Works, and Qian Jieren, Minister of Revenue, all tightened.
Saying without doing, making a lot of noise but little action, Chu Chen's approach indeed made many officials below think it was just a show. But they knew that Prime Minister Chu was playing a grand game, and his previous inaction must have been due to some secret preparations. Now, it seemed to be the case.
As expected, Prime Minister Chu had summoned them to discuss this matter so seriously, indicating that he intended to get down to business.
"What I said about reform before was by no means child's play or a deception of His Majesty! I have repeatedly given opportunities to those below, but some people just don't cherish them, they insist on going against the imperial court and my administration. This is completely disregarding me and His Majesty!"
Chu Chen said sternly and sharply, "Therefore! Starting today, the reform officially begins! I have summoned you here today to explain in detail the specific content of the reform."
Saying this, Chu Chen paused and waved his hand. Soon, clerks distributed booklets.
Chu Chen raised the booklet in his hand and said, "The land survey and tax reform, and the tiered taxation that I am promoting, were roughly explained at the court session that day. I will not talk about the land survey; if you don't understand, resign and retire. The main points I want to talk about are the latter two."
"Regarding the tax reform, as the name suggests, it will begin with your Ministry of Revenue, Minister Qian. First, an announcement will be issued to notify the local areas to change the tax system, and a public notice period will be announced before its implementation. Taxes will be collected according to the new law next month."
"The content of the reform is not much. Thirty percent of the land tax will remain unchanged this year, but after the spring of next year, it will be changed to twenty percent."
"In addition to the land tax, two new taxes will be added, namely commercial tax and value-added tax, which will be levied on all business operators. Whether it is opening a shop, running a factory, or setting up a stall, any commercial activity will require taxation. The tax rate will be proportional for large amounts and fixed for small amounts."
"All shops, merchant fleets, factories, workshops, and other establishments will have to pay twenty percent of their profits as commercial tax each month. For street vendors, citizens entering the city to sell goods will be charged a stall tax of two wen per day. Vegetables and grains they sell will not be taxed, but if they sell non-food items, they will be taxed at twenty percent commercial tax."
"The value-added tax will only apply to factories and workshops for processing and operation. A ten percent value-added tax will be levied on top of their costs. For example, if a desk costs one hundred wen, a ten percent value-added tax will be ten wen, and its selling price will be one hundred and ten wen. Is this understandable?"
"Your subordinate understands."
Qian Jieren's eyes shone, and his face bloomed with a smile.
If his Ministry of Revenue collected taxes in this way, the tax revenue next year would be considerable, and he would finally not have to live frugally.
However, there was a problem. Qian Jieren thought of it and asked, "Prime Minister, the tax rate is not a problem, but how can my Ministry of Revenue accurately determine their profits?"
"We'll talk about that later."
Chu Chen shook his head slightly and did not answer this question first. Instead, he continued, "As you can all clearly see from my tax reform, this is a measure to increase taxes on the wealthy. Since the rich have money and are taxed more, naturally, we should take care of the poor households who have no money. Some arbitrary taxes will be abolished. Individually, these taxes are not much, but added together, they are a mountain pressing down on the poor households, making it difficult for them to breathe."
"Therefore, in the tax reform, except for the poll tax, which is fixed at one wen per person per month, all other miscellaneous taxes will be abolished. Only agricultural tax, commercial tax, value-added tax, stall tax, and poll tax will be levied."
"Thus, those without land or property only need to pay a fixed one wen poll tax per month and will not have to pay any other taxes, greatly reducing their living pressure."
"Uh~ Prime Minister, this is absolutely not permissible! If so many taxes are abolished, how can local governments operate?"
Qian Jieren urgently pleaded.
"The taxes of local governments have always been retained by each level proportionally for their own use. Agricultural tax guarantees grain, and commercial tax guarantees money. How can the local governments lack money? It's just that those who want to take advantage of the situation will have no pretext to make money, right?"
Chu Chen looked at him coldly and said indifferently.
"This, this, then how much tax does the Prime Minister intend to leave for the use of local governments at each level?"
"County, commandery, and prefecture levels will retain ten percent, and the remaining seventy percent will be submitted to the Ministry of Revenue of the imperial court. Are there any problems with this?"
"No, no."
Qian Jieren breathed a sigh of relief and quickly waved his hands.
Although this proportion was lower than before, with the support of commercial tax and value-added tax, the revenue would actually be more than before, so there was no need to worry about insufficient income.
"After discussing the tax reform, I plan to split a few new departments from your Ministry of Revenue and Ministry of Works."
Before Chu Chen could finish speaking, Meng Yuan and Qian Jieren were stunned and became a little nervous, fearing that too much power would be taken away.
"Don't worry about your status. You will still be ministers, but your responsibilities will be more precise and specialized."
Chu Chen waved his hand and continued, "The newly established departments will be formed by drawing from the Commercial Affairs Department of the Ministry of Revenue and the Land Affairs Department of the Ministry of Works to form a Ministry of Commerce and a Ministry of Agriculture, specifically responsible for managing commerce and agriculture."
"The Ministry of Commerce will have four departments under it: the Commercial Tax Department, the Industry and Commerce Department, the Enforcement Department, and the Audit Department. The Commercial Tax Department will be responsible for collecting commercial taxes, the Industry and Commerce Department will be responsible for handling permits, managing and guiding industry and commerce, the Audit Department will be responsible for investigating tax evasion, and the Enforcement Department will be responsible for forcibly collecting taxes from businesses that do not pay."
"The Ministry of Agriculture will have four departments under it: the Agricultural Tax Department, the Sericulture Department, the Grain Management Department, and the Audit Department. The Agricultural Tax Department will be responsible for collecting grain taxes, the Sericulture Department will be responsible for guiding farmers' cultivation and statistics on cultivated area and types, the Grain Management Department will be responsible for granaries across the country and monitoring grain prices, and the Audit Department will be responsible for investigating in the countryside to verify the accuracy of data."