Taxation in Kiravia
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.
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 of 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%
Sin Tax
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% however other ones include taxes junk food, plastic products, and lottery earnings.
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.
| 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
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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.