Is it plausible for a isolated customs-fort to be collecting octroi and customs taxes simultaneously

Question

So my micro-setting revolves around the sole customs-fort guarding the entrance (land bridge/causeway) to a impoverished city. This city is a fragment of a shattered Empire where the city administration all portray themselves as being the official rump-government in order to maintain the veneer of legal imperial legitimacy to their subjects.

Being impoverished, over-populated, crime-ridden, diseased, but still 'vaguely better off' than the anarchic chaos-ridden lands of the former empire, this city attracts large numbers of refugees, itinerant traders, immigrants etc, all of whom add to the social security (and actual security) financial burden.

Needing revenue, as well as wanting to reduce the influx of people into the city, the customs-fort charges both 'provincial' taxes, and 'imperial' taxes at the same time. The collected revenue streams are both subsequently equally drawn upon for use (since in the minds of the city-state, they are now one and the same).

Based upon my own research, Octroi appears to be collected at the local level, while entry taxes, customs dues/levies are collected by state/central govts. So my question is would it be considered plausible for this single border-post to collect both octroi/provincial taxes as well as entry taxes/customs/tariffs/imperial taxes simultaneously.

Border post fees and levy's

Octroi - 1/8th of all saleable goods are to be given over to the border guards upon entry

Customs Levy - 1/8th of all saleable goods are to be given over to the border guards upon entry and exit

Road Toll - 1 Silver (or equivalent) to be paid to the border guards each time for the privilege of safe passage

Postal duty - 1 Bronze to be paid per mail package sent

Visitor Tax - 1 Silver (or equivalent) to be paid to the border guards for the privilege of safe passage

Residence fee - 1 Diamond (or equivilent) to be paid to the border guards for the privilege of becoming a permanent resident

currency

1 diamond = 120 gold

1 gold = 120 silver

1 silver = 120 bronze

Answer 1

That's not a tax, that's a racket for the postal service.

It costs me $1$ to mail a package to my factor in the city, taking the bronzic coin as having units of 1.

If I sell $A$ packages via my factor, it costs me $A$. (Not counting the cost of having my factor mail me the money out of the city again.)

Obviously all my prices are inflated by $1$ inside the city to cover my shipping.

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By comparison, suppose I walk into the city with $A$ packages worth of products after paying the 2/8 tax (so I started out with $\frac{8}{6} A$), sell them all to my factor at the price he will sell them for, and leave empty to avoid the excise tax.

I must pay $240+Ax/3$ for the privilege, where $x$ is the value of each package in bronzettes. ($s+s = 240$, and it costs me a fourth of my 8/6A of goods to walk through the door, leaving me with 6/6A, which is 2/6A less than I started with.)

To be worth doing it this way instead of by mail, it must cost less than doing it by mail, so we must satisfy

$A > 240+Ax/3$

Where $\frac{8}{6}A$ is the maximum number of packages worth of stuff I can fit on my wagon, and $A$ is the maximum number I can reliably expect to sell out of once I'm inside.

Hence

$-720/A > x-3$

I can't sell at all unless x is bigger than my costs. But the above imposes a strict upper limit of $x\lt 3$. How much less than 3 depends on $A$. Even 3 may already be larger than my minimum cost per package (i.e. production costs plus transport costs plus insurance plus other taxes, tolls, bribes, and so on not included above). OP can play with different values of $A$ depending on how big OP intended packages to be to discover the actual value of $x$.

This probably means that imported goods which cost less than a few bronzies simply don't exist in the city, and all imported goods that do exist are imported through the post office.

Tax revenue is zero, and the postal service has a private army of mercenaries to fend off attempts by the puny government army to shoe in on their lucrative racket.

Answer 2

If this is a game, then yes, sure, whatever makes sense in the game mechanics.

If this a story with any kind of pretentions of verisimilitude, then the taxes proposed are all over the place, some of them maybe fine, some of them grossly excessive, and others ridiculously low.

• First of all, the French word octroi is not all that widely used in English. More usually, the corresponding tax is called an excise or a sales tax. Being collected at the border, the tax is an excise; a sales tax would be applied to any retail sale of any goods within the city.

• The nature of an excise tax is that it is large and applies to selected categories of goods. I would have expected to see a different taxation on wine, for example, compared to cabbages.

• Note that you have effectively placed a 23% tariff on all imported goods. I hope that the inhabitants of the city are wealthy enough, because in the end it is them who will pay the tariff: merchants never pay the tariff themselves; they advance the tariff to the authorities, but then they surely collect it back from the consumers.

• The proposed so-called sales tax makes no sense whatsoever, but then nobody conducts any business on premises of the customs-house anyway. A sales tax is always a fraction of the value of the goods sold. Makes no sense to impose the same tax on the sale of a tun of wine as on the sale of a pint of beer.

• The proposed road toll and visitor tax are grossly excessive. Basically, you have made sure that nobody ever uses the road and visits the city. In pre-modern times most people would only ever even see a gold coin maybe once every ten years, if that, and most people would never in their lifes ever have a gold coin.

• The proposed citizenship tax is unbelievably ridiculously low, and its very existence requires a heavy dose of suspension of disbelief.

  Normally and historically, citizenship is awarded, not bought. It is not clear from the question what kind of historical stage of development this is supposed to imitate, but:

  • If this is supposed to imitate a medieval city, then citizenship is normally acquired by living in the city and paying taxes for a number of years. Most usually a certain fiscal threshold would apply; only people worth at least a certain amount would be considered citizens.

  • If this is supposed to be a pre-modern state, then I'm not sure what the word citizenship even means. Pre-modern states were most usually monarchies of some kind, and monarchies had subjects, not citizens. One could be, for example, a citizen of Paris, but one could only be a subject of the King of France. And becoming the subject of a foreign sovereign was definitely not as easy as paying a certain sum of money.

  Overall, if you really want to institute a citizenship tax then I would expect it to be very much higher than a lowly road toll.

• I am not at all certain what to do with a postal tax in a pre-modern context. The cost of sending a packet is basically whatever the courier charges. One farthing seems on the low side even for sending a letter from one place in the city to another place in the same city. Maybe the question is about a tax paid by the couriers for the privilege of doing business as a courier?

Finally, a note on the proposed currency system. The value of precious metal coins is the value of the metal are made of. The King may want to make one gold coin equal to 12 silver coins, but in any kind of pre-modern society the actual value would be given by the value of the metal. It was only in the 19th century that the Brits realized that they could make the silver coins underweight tokens, and decouple them from the value of the silver; on the other hand the French never got this idea, and continued to try to force a fixed rate of exchange between silver and gold with rather unhappy consequences.

Anyway, if the silver coins are intended to be of small enough value as to be routinely used for daily purchases, then the gold coin is a teeny tiny unpracticably small gold coin. The smallest practicable gold coin is about 3 grams of gold; in our money, that would be about 270 dollars, euros, whatever. This makes the bronze coin much more valuable than any kind of small bronze coin ever used; I would have expected the gold coin to be worth much more than 144 bronze coins. A more believable value ratio between the smallest bronze coin and the smallest gold coin would be somewhere around 1,000 to 1. (It was 1,600 to 1 or 800 to 1 in Roman times, 960 to 1 in the 19th century English money, and 1,000 to 1 in the Latin Monetary Union system.)

Oh, and the proposed currency system is unbelievably simple. In any kind of believable setting you would have many more than 3 kinds of coins. Farthing, ha'penny, penny (copper), six pence, shilling, half-crown (silver), sovereign (7.98805 grams grams of gold 22/24 fine); or 0.01 francs, 0.02 francs, 0.05 francs, 0.10 francs (copper), 0.20 francs, 0.50 francs, 1 franc, 2 francs, 5 francs (silver), 10 francs (3.2258 grams of gold 0.900 fine), 20 francs etc.