Economy of Iboma: Difference between revisions
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===Secondary===
===Tertiary===
==Finances==
===Taxes===
The government wants to allow people to spend their money in a way that makes them happy. At the same time it expects people to save for their own misfortunes and take care of themselves. As such, it does not have a large welfare system that requires high taxes. Therefore,taxes in Iboma are very low by international standards. Personal income tax is 20% for the wealthiest earners (1 million SHD and above) and 0% for the least wealthy (those earning 7,000 SHD and lower per annum). Company income tax is charged on profits not reinvested into the company at maximum of 15% for a company that makes a profit of 2 million SHD or more. Capital gains tax is fairly high, at a rate of 40% for gains above 1 million SHD, to prevent the uncontrolled growth of speculative investments. Value-added tax is low to encourage people to consume, at a rate of 5%. Taxes are charged on goods that the government feels will shorten people's Lifespan. They aim to drive up the price of these goods to reduce demand. Thus, taxes on tobacco products, alcoholic beverages and high-in-sugar foods and drinks can be over 70% of the purchase price.
===Debt===
Opposing forces influence how the government, businesses and people take on debt. On one hand, because people live long, the period of time required to pay off debts is much shorter relative to their lifespan. Thus, people are willing to take on long-term debts that will improve their quality of life in the future such as student loans, mortgages and car loans. One the other hand, people are confident enough in their ability to work long enough before acquiring possessions like furniture, having a child or saving for a trip overseas that they avoid short-term debt. Furthermore, because of the distrustof foreign patriarchal financial systems, the government, local businesses and everyday citizens avoid borrowing money from foreigners as much as Possible. Thus, the country has a low rate of Foreign debt. As a result.the government has been able to comfortably pay off debt and keep debt rates fairly low.
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