Taxation in Kiravia

Headquarters for the Federal United Taxation Authority in Kartika

Taxation in Kiravia is the largest source of revenue the government has with tax revenue being 38.6% of Kiravia's GDP or $20,206,601,700, taxation in Kiravia is handled at both the federal and provincial levels however both levels of taxation are overseen by the Federal United Taxation Authority the revenue service in Kiravia which handles administration of taxes, advising the government on taxation policy, and responding to and arresting people who commit tax fraud or tax evasion. While multiple methods of taxation exist in Kiravia the primary ones which make up the majority of the government's revenue are:

• The income tax (both corporate and personal)
• The land value tax
• The value added tax (VAT)
• The excise tax

Income taxes are the only ones of the aforementioned taxes imposed at the federal level with the exception of the VAT, which is split between the federal and provincial government, all others are imposed by government at the provincial level with the exception of excise taxes on fuel which don't make up a majority of government revenues but are imposed on a national level.

History

For most of Kiravian history, taxes were mainly assessed upon the agricultural output of a jurisdiction and collected in kind. Public revenue was extracted from non-agricultural enterprises mainly in the form of royalties, rents, fees for licenses and monopolies, and similar charges. Taxation in coin was practised during the Classical Period but became obsolete in the Postclassical Period as the spatial scale of the economy contracted and legible, organised markets receded, before becoming practical once more during the 14th century AD. From this time until the Republican Restoration, urban authorities depended heavily on octroi taxes, which is why many historic city centres dating from long after the feudal era are walled, though not truly fortified. The rural populace during the same period was still taxed (though now in money) on their farm produce and were obliged to pay duties on various manufactures, such as linen and woolen cloth, paper, distilled liquor, ruxburya, saltpeter, and pins. Several of the later Coscivian Empires and many inland kingdoms and statelets imposed a salt tax. The constitutions of the Kiravian Confederation and Kiravian Federacy authorised the confederal/federal governments to levy a salt tax, but collection was discontinued in 1878 AD.

Types of Taxation

Personal Income Tax

Kiravia has a tax on income an individual earns, the tax applies to all Kiravian citizens even if they are not currently residing in Kiravia or earn money elsewhere in the world. Individuals who are not citizens of Kiravia but still earn income in the country are also subjected to personal income taxes however only applying to the income they earn in Kiravia. Foreigners earning an income in Kiravia are only subject to taxation on their incomes if they have been earning an income in Kiravia for 6 months or more with this applying regardless of how spaced out their income is or if the source of their income in Kiravia changes however tax evasion of this income is significantly higher than it is for Kiravian citizens due to the complications involved in trying foreigners in Kiravia without them having Kiravian citizenship.

The rates of income tax in Kiravia are progressive and can go from 0% income tax at the lowest level to 25% at the highest level however there are other services taken out of individuals incomes such as 10% for pension funds and 5% for state insurance at the provincial level. Kiravia also has a tax on dividends earned either by Kiravian citizens in Kiravian or international companies or by people residing in Kiravia earning dividends from Kiravian companies, the rate of this tax is set at 20%. However dividend tax is also imposed on branches of Kiravian companies distributing dividends to non-residents even if they are not in Kiravia.

Corporate Income Tax

The income tax on corporate entities in Kiravia is generally set at a rate of 14.5% however for non-residential corporate entities various other fees from the Kiravian government may be applied that while not legally counted as a tax are considered by many to be very similar such as regular licensing and zoning fees.

Capital Gains

Capital gains taxes in Kiravia are enforced at both the federal and state levels with people being required to pay capital gains taxes in both, however the capital gains tax at the provincial level is smaller and adds up to less in total than the personal income tax as an incentive for people to invest in Kiravia. The taxation rates for the federal level are 10% and while levels for the states vary none are higher than the federal rate with the highest rates being 8% and the lowest being 0% in certain provinces through exemptions though across Kiravia the average provincial rate is 5%.

Value Added Tax

The VAT for Kiravia currently sits at 20% with the base for this tax being made up of various things primarily the movement and sale of goods, services, or property, and construction contracts as well as the import of goods into Kiravia. While the administration for the VAT is handled at the federal level the profits for it are split between federal and provincial governments. While the VAT is set nationally some provinces in Kiravia allow for companies to apply for a reduced VAT rate so long as the company has been operating in the province for at least 2 years and has generated a certain among of revenue based on the companies' sector.

Excise Tax

Fuel Tax

Fuel tax is the only excise tax that is handled on the federal level and is set at a rate of 22%

Liquor & Tobacco Taxes

Sin taxes in Kiravia are handled at the provincial level and are a general name for many different taxes with the largest earning and most consistent varieties being on liquor and tobacco with each one being set at 12.5%

Sin and Pigovian Taxes

Provinces have imposed numerous other excises with the dual policy aims of collecting revenue and encouraging changes in behaviour among their populations. Examples include taxes on lottery earnings, men's magazines, contraceptive products, colour photography, tattoos and piercings, indoor tanning services, bicycles, and videographic games, video vixens, and "enriched energy drinks". In recent decades, some provinces and localities have adopted or considered various excises to correct for negative environmental externalities.

In 2028 AD, Ilfenóra State and neighbouring Venèra State passed legislation to establish a poll tax on unmarried men over the age of 25. Enforcement is currently suspended while litigation over the constitutionality of the taxes is pending. Though not an excise, it is nonetheless intended to incentivise behavioural change.

Dangerous proposals by rogue municipal governments to impose sugary drink taxes have been heroically thwarted by the independent consumer advocacy NGO Kiravians for Consumer Freedom.

Land Taxes

Property taxes in Kiravia are collected in the form of a land value tax where instead of the provincial governments taxing the buildings and additions to the property the property is taxed for its inherent value such as proximity to roads among other things. The tax rate for the LVT in Kiravia is dependent on the provinces starting cumulative value (SCV) with an average tax rate of 1% however the rates for the SCV are as such.

Caption

SCV	Tax rate
Excess of SCV by less than 5 times	1.5%
Excess by more than 5 but less than 10	2.5%
Excess of more than 10 but less than 15	3.5%
Excess of more than 15 but less than 20	4.5%
Excess of more than 20	5.5%

Taxation of land used for agricultural purposes is considered a separate tax from the land value tax with it being taxed at a flat rate of 0.07%

Tariffs

TBD

Tax Administration

Federal United Taxation Authority raid on a tax evader

The administration of taxation in Kiravia is managed by the Federal United Taxation Authority. It is the government administrative body and the most important tax authority responsible for collecting of the national taxes as well as for investigating, auditing, and arresting people who have committed evasion or fraud for their taxes in Kiravia. The organization also assists both the federal and provincial governments in designing their tax policies even though they have no power to change the policy or pass taxation laws on their own. The Federal United Taxation Authority usually audits large businesses yearly while medium and small sized businesses are often audited on a biannual basis. The Federal United Taxation Authority currently reports having 280,000 employees though in recent year this number has been slowly decreasing, 196,000 employees for the organization work full time while the rest are seasonal workers.

Tax returns in Kiravia are not filed automatically and citizens must have their returns turned in to the government by March 1st, on average citizens of Kiravia and residents spend 170 hours annually filing tax returns and paying taxes.