Revenue Reform Resolution, 651

A resolution to simplify the Kodiaker tax system, and make it easier to expand in future.. 'ACTIONED ## MONTH YEAR with ## Aye, ## Nay, ## Abstain.

Be it resolved

IDENTIFYING the myriad of tax acts;

RECOGNISING the excessiveness of such;

PREPARING for the inevitable future of additional tax acts;

HEREBY alters Title 7 of the Kodiak Law Code to: -

1. REPEAL The Kodiak Revenue Directorate Act, 630
2. REPEAL The Individual Income Tax Act, 630
3. REPEAL The Enterprise Tax Act, 643
4. REPEAL The Commodity and Services Tax Act, 643
5. REPEAL The Micro-Enterprise Tax Act, 649
6. ENACT The Kodiak Revenue Directorate Act, 651
7. ENACT The Tax Code Act, 651

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The Kodiak Revenue Directorate Act, 651

An act to establish a centralized organization for the implementation and enforcement of Title 7.

Article 1 – Establishment, Management, & Duties

1.1 - Establishes the Kodiak Revenue Directorate (KRD), headquartered in Rykkburgh with satellites in all major provinces, under the authority of the Ministry of Revenue and Treasury.

1.2 - The day to day activities of the KRD will be directed by a 9 person board, the Revenue Board.

1.2.1 - The Minister of Revenue and Treasury chairs the board.

1.2.2 - A Director of the Revenue Board (DoRB) is to be selected by the Revenue Board.

1.2.3 - The Minister of Revenue and Treasury may select appointments to fill vacancies to be approved by the board.

1.2.4 - The Minister of Revenue and Treasury retains the right of veto over board appointments put forward by internal selection.

1.2.5 - Should a board position remain vacant for 3 months, whether by lack of suitable candidates or Minister Veto, the DoRB may appoint an interim board member to allow for continual function of the KRD.

1.3 - Every 9 financial years the KRD must release the data reported by tax forms publicly in full.

Article 2 – Obligations of Individuals, Businesses, & Corporations

2.1 - Financial Year (FY) Definition: The FY begins at 00:00 July 1st, and ends at 23:59 June 30th.

2.2 - Individual Definition: A person who has resided and earned taxable income within the Kodiak Republic for any amount of time within a financial year.

2.2.1 - An Individual is obligated to report all taxable income to the KRD within 3 months of the end of the FY (EOFY), by 23:59 September 30th.

2.3.1.1 - The taxable income of an Individual shall include income gained through illegal means.

2.2.2 - The document used for Individuals who are not married or are not residing with a common law spouse is the KRD-I1.

2.2.3 - The document used for Individuals who are married or are residing with a common law spouse is the KRD-I2.

2.2.4 - The document used for Individuals who are not married AND are not residing with a common law spouse, yet have been residing together with other Individuals for 6 financial years or more is the KRD-I3.

2.2.5 - It is the responsibility of an Individual to ensure reported income is accurate and truthful.

2.2.6 - A qualified tax agent may be employed by an Individual to assist with reporting income on their behalf. Doing so does not absolve an Individual of the responsibility outlined in 2.2.5.

2.2.7 - A tax agent employed by an Individual has an obligation to submit the relevant documents in good faith and not submit documents that are inaccurate or misleading in an effort to assist an Individual to contribute less than they are required to.

2.3 - Business Definition: An enterprise that provides goods or services in return for payment (payment may be made in currencies other than Kodiak florins, and includes e-commerce), AND Has less than 200 employees, AND operates in less than 5 unique locations of which at least 1 is within the Kodiak Republic.

2.3.1 - A Business is obligated to report all taxable revenue to the KRD within 6 months of the EOFY, by 23:59 December 31st.

2.3.2 - The document used by Businesses with less than 50 employees, OR only 1 unique operating location, OR having revenue less than ₣100,000 per FY is the KRD-B1.

2.3.3 - The document used by Businesses with 51 – 200 employees, OR having multiple unique operating locations, OR having revenue in excess of ₣100,000 per FY is the KRD-B2.

2.3.4 - The document used by Businesses who fall outside of 2.3.2 AND 2.3.3, but do not meet the definition of a Corporation in 2.4 is the KRD-B3.

2.3.3 - A Business is obligated to have a designated Individual assume overall responsibility for reporting. The Individual may be the Owner, the Chairperson of a Board, or an Employee employed directly for this purpose. This Individual is henceforth referred to as the Reporting Officer (RO).

2.3.4 - It is the responsibility of the RO to ensure reported revenue is accurate and truthful. To assist in the execution of their responsibilities, they are afforded the right to request any and all documentation they require from the Business.

2.3.5 - A RO, authorized by the Business, may engage a tax agent(s) to assist with reporting on their behalf. Doing so does not absolve the RO of their responsibility in 2.3.4.

2.3.6 - A tax agent employed by an RO on behalf of a Business has an obligation to submit the relevant documents in good faith and not submit documents that are inaccurate or misleading in an effort to assist a Business to contribute less than they are required to.

2.4 - Corporation Definition: An enterprise that provides goods or services in return for payment (payment may be made in currencies other than Kodiak florins, and includes e-commerce), AND has more than 200 employees, AND operates in 5 or more unique locations of which at least 1 is within the Kodiak Republic.

2.4.1 - A Corporation is obligated to report all taxable revenue to the KRD within 11 months of the EOFY, by 23:59 May 31st.

2.4.2 - The document used by Corporations with between 200 – 500 employees, OR only 1 unique operating location, OR having revenue less than ₣1,000,000 per FY is the KRD-C1.

2.4.3 - The document used by Corporations with over 500 employees, OR having multiple unique operating locations, OR having revenue in excess of ₣100,000,000 per FY is the KRD-C2.

2.4.4 - A Corporation is obligated to have a designated Individual assume overall responsibility for reporting. The Individual may be the Owner, the Chairperson of a Board, or an Employee employed directly for this purpose. This Individual is henceforth referred to as the Reporting Officer (RO)

2.4.5 - It is the responsibility of the RO to ensure reported revenue is accurate and truthful. To assist in the execution of their responsibilities, they are afforded the right to request any and all documentation they require from the Corporation.

2.4.6 - A RO, authorized by the Corporation, may engage a tax agent(s) to assist with reporting on their behalf. Doing so does not absolve the RO of their responsibility in 2.3.4.

2.4.7 - A tax agent employed by an RO on behalf of a Corporation has an obligation to submit the relevant documents in good faith and not submit documents that are inaccurate or misleading in an effort to assist a Corporation to contribute less than they are required to.

Article 3 – Enforcement

3.1 - The KRD’s main method of enforcement will be in the form of fines. Repeated or egregious offences may be referred to the Chief Justice for consideration of criminal charges.<

3.2 - Offence Definition: A breach of obligation or responsibility per Title 7.

3.2.1. - An Offender can have multiple First Offences, as long as all Offences are unique.

3.3 - Penalty Unit Definition for an Individual or Reporting Officer: 2% of the Offender’s Annual Income, calculated by the median of the last 3 financial years where applicable. Where not applicable, such as an immigrant newly entering the workforce, the Revenue Board will make a judgement taking into consideration previous years where applicable , the income of peers, savings, and other streams of income of the Offender.

3.3.1 - For a first offence where there is reasonable doubt that the offence was made ‘in Bad Faith’, the Offender shall be fined 0.5 Penalty Units.

3.3.2 - For a second offence, or a first offence where there is reasonable doubt that the offence was made ‘in Good Faith’, the Offender shall be fined 2 Penalty Units

3.3.3 - For a third offence, the Offender shall be fined 10 Penalty Units.

3.3.4 - For any additional offences, or offences in excess of ₣50,000, Referral of Offender to Chief Justice for consideration of further fines or arrest.

3.4. - Penalty Unit Definition for a Business or Corporation: 4% of the Offender’s Annual Revenue, calculated by the mean of the last 9 financial years where applicable. Where not applicable, such as the creation of a new Business or Corporation, the Revenue Board will make a judgement taking into consideration previous years where applicable , the revenue of competitors within the same field, and other streams of revenue of the Offender.

3.4.1 - For a first offence where there is reasonable doubt that the offence was made ‘in Bad Faith’, the Offender shall be fined 0.5 Penalty Units. This is in addition to the individual penalty against the RO in 3.3.2.

3.4.2 - For a second offence, or a first offence where there is reasonable doubt that the offence was made ‘in Good Faith’, the Offender shall be fined 2 Penalty Units. This is in addition to the individual penalty against the RO in 3.3.3.

3.4.3 - For a third offence, the Offender shall be fined 10 Penalty Units. This is in addition to the individual penalty against the RO in : 3.3.4

3.4.4 - For any additional offences, or offences in excess of ₣500,000, Referral of Offender to Chief Justice for consideration of further fines or arrest.

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The Tax Code Act, 651

An act to unify taxes into a singular tax code.

Article 1 - Definitions

1.1 - The following shall be defined using the definitions provided in the Kodiak Revenue Directorate Act, 651.

1.1.1 – Individual

1.1.2 - Business

1.1.3 - Corporation

Article 2 - The Income Tax

2.1 - Creates a progressive tax on all earnings by Individuals set at the median annual tax rate of 35%, and sets Income Tax Brackets as follows:

2.1.1 – The first ₣20,000 of Income shall be tax free

2.1.2 - ₣20,000 - ₣40,000 shall be taxed at 20%

2.1.3 - ₣40,000 - ₣70,000 shall be taxed at 35%

2.1.4 - ₣70,000 - ₣150,000 shall be taxed at 50%

2.1.5 - ₣150,000 and over shall be taxed at 65%

Article 3 - The Corporation Tax

3.1 - Enacts a flat tax upon all gross operating profits of Corporations with the Kodiak Republic.

3.2 - The Corporation Tax Rate shall be set at 30% of total reported gross profitable revenue.

Article 4 - The Capital Gains Tax

4.1 - Enacts a flat tax upon the net physical or financial capital income of an Individual, Business, or Corporation.

4.2 - Permits a one-to-one deduction of capital losses to present capital gains if such capital losses were accrued within the previous three financial years.

4.3 - The Capital Gains Tax Rate shall be set at 25% of total reported capital gains after deductions.

Article 5 - The Land Value Tax

5.1 - Creates an annual flat tax on the value of privately owned and managed land.

5.2 - Specifically excludes the valuation of any property or improvements to a parcel of land.

5.3 - Sets the annual Land Value Tax Rate to be 10%.

Property Tax

Article 6 - Property Tax

6.1 - Creates a flat tax on all private landed property.

6.2 - Specifically includes the valuation of any property or improvements to a parcel of land.

6.3 - Sets the annual Property Tax to 5%.

Article 7 - The Under-utilised Residential Property Tax

7.1 - Creates an annual tax on the value of residential property left vacant for more than six months in a financial year.

7.2 - Sets the annual Under-utilised Residential Property Tax to 25%.

Article 8 - The Point of Sales Tax

8.1 - Creates a flat tax on the sale of all goods and services to be collected by the seller at the point of sale.

8.2 - Sets the Point of Sale Tax Rate to 6% of the gross untaxed sale price.

Article 9 - The Petroleum Sales Tax

9.1 - Creates a flat tax on the sale of petroleum, gasoline, butane, diesel, and other oil based fuels.

9.2 - Appends this tax in addition to the Point of Sales Tax.

9.3 - Sets the Petroleum Tax to be 18% of the gross sale price.

Article 10 - The Tobacco Sales Tax

10.1 - Creates a flat tax on the sale of cigarettes, cigars, snuff, chew, loose tobacco, and all other tobacco products to be taken internally.

10.2 - Appends this tax in addition to the Point of Sales Tax.

10.3 - Sets the Tobacco Sales Tax to be 30% of the gross sale price.

Article 11 - The Alcohol Sales Tax

11.1 - Creates a flat tax on the sale of beer, wine, spirits, and all other ethanol-containing products intended to be taken internally.

11.2 - Appends this tax in addition to the Point of Sales Tax.

11.3 - Sets the Alcohol Sales Tax to be 30% of the gross sale price.

Article 12 - The Recreational Drugs Tax

12.1 - Creates a flat tax on the sale of all legal Schedule B, Schedule D, and Schedule E recreational drugs.

12.2 - Appends this tax in addition to the Point of Sales Tax.

12.3 - Removes this tax for any substance acquired on the advice and prescription of a practicing and certified medical professional.

12.4 - Sets the Recreational Drugs Tax to be 35% of the gross sale price.

Article 13 - The Luxury Tax

13.1 - Creates a flat tax on all luxury goods.

13.2 - Appends this tax in addition to the Point of Sales Tax.

13.3 - Sets the Luxury Tax to be 25% of the gross sale price.

Article 14 - The Sex-Work Tax

14.1 - Creates a flat tax on payments for Sex-Work.

14.2 - Sets the Sex-Work Tax to 2% of the gross untaxed price.

Article 15 - The Financial Transactions Tax==

15.1 - Creates a flat tax on all Financial Transactions.

15.2 - Sets the Financial Transactions Tax to 5% of the transaction's value.

Article 16 - The Wealth Tax

16.1 - Creates a flat tax on all earnings by Individuals that are over ₣1,500,000.

16.2 - Sets the Wealth tax at 75%.

Article 17 - The Import Tax

17.1 - Creates a flat tax on all imported goods and materials.

17.2 - Appends this tax in addition to the Point of Sales Tax.

17.3 - Sets the Importation tax at 15% of the gross sale price.

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