If there is one thing Governments love, it's money.

Politicians love it when you pay taxes, and they love it even more when you slip it into their pockets.

When it comes to taxes, the game has two methods of taxing you.

The main method of taxation is on your income.

Every three months, the game will subtract your expenses from your revenues, leaving you with your income.

We then multiply the income by your HQ city's tax rates. And that is the amount you pay for the quarter.

For example, if you made $10,000,000 in revenues for the quarter, and you spent $9,000,000 to make that money, your taxable income is $1,000,000.

If your HQ city’s tax rate is 25%, then you owe $1,000,000 * 0.25 = $250,000 in taxes for the quarter.

They call these payments estimated taxes. The Monthly Revenues, Expenses, and Cash Flow chart is a good visual representation of this.

You can find the report in the reports window, under charts.

Why are they called estimations? You actually don't owe taxes until the end of next year's first quarter.

At the end of the first quarter, the game runs your numbers for the entire year. We subtract your yearly revenues by your yearly expenses, leaving you with your taxable income.

The game then multiplies that value against your HQ city’s tax rate. And that gives you the amount of taxes you owed.

We then subtract your estimated tax payments from the owed taxes.

If you paid too much, we refund the amount you overpaid. If you paid too little, you must pay what you owe.

Why does this happen?

Thanks to modern economics, governments often have high debt burdens. Estimated taxes act as an advancement so they can keep operating.

This leads us into the other form of taxation in the game.

On harder difficulty levels, we have an import tax to counter players operating in low HQ tax cities.

This tax applies to vehicles shipped from a factory outside of a country that has a lower tax rate than the receiving branch.

The tax amount is half the tax rate difference between the two cities. Or a flat rate of 8%, whichever is higher.

We multiply the amount by the unit price of each vehicle shipped. And that is your import tax rate.

It’s not enough that government takes your hard-earned money. Politicians want a piece of the action too.

And they’re the ones that make the laws and write the tax policy.

That’s where lobbying comes into play.

Technically, lobbying isn’t bribery. But when you’re a big powerful industry, lobbying is just semantics for legal bribery. And there might be a little illegal bribery going on too.

Through campaign cash flows, PACs, job offers, speaking fees, donations, and many other forms of lobbying, you can get government officials on your side.

Lobbying can get you discounts on building factories, generate favorable legal outcomes, win contracts that you shouldn’t, and even reduce the amount of taxes you pay. Corruption knows no bounds.

To lobby, click the phone in the office, then “Lobby.”

The Lobbying Window will open.

This area shows how much money in taxes and subsidies you received this year. And it shows how much money per month you’re spending and your effectiveness rating.

The maximum effectiveness rating is linear to the amount of money you spend on lobbying. The value increases slowly over time but will fall immediately if you reduce your budget.

Politicians hate when you take away their gifts.

To adjust the lobbying budget, slide this slider. You can use the lock button to automatically adjust this slider to the same position each year.

Please note, the update may not happen in the same month as the maximum budget changes.

Don’t forget to click the Set Budget button.

While most of the benefits of lobbying are hidden, you can view factory construction subsidies when you build factories.

In summation, you pay taxes on your income quarterly. If you overpaid for the year, you will get some money back.

You can reduce this tax bill by lobbying. And lobbying has many other perks.