A COMMISSION-BASED BUSINESS MODEL FOR B2B VENDING-MACHINE BUSINESSES: THE LEAST COMMON DENOMINATOR OF THE TAXATION SYSTEMS IN JAPAN, UKRAINE, AND THE USA

Abstract

The war devastated many aspects of life in Ukraine. The digital economy does not function without the proper working physical infrastructure, and vice versa. The world has two prominent economies that continually and successfully overcome massive-scale destruction of their civil infrastructure due to recurring natural disasters, namely Japan and the the USA. The short-term and long-term fiscal measures enacted by the government of Ukraine are similar to the ones undertaken by the governments of Japan and the USA. The short-term measures to overcome destruction due to the war, the recurring hurricanes, and the multitude of natural disasters, are comparable in all three countries and are based on short-term fiscal easing. The long-term measures relative to the topic seem to be absent in the USA. However, the long-term measures in Japan and Ukraine coincide directly and consist in the introduction of a special tax to aid recovery and increase robustness of the economy in the face of recurring threats, the military and natural respectively. The biggest difference between the tax laws of Ukraine, Japan, and the USA is the existence of a simplified taxation system in Ukraine. The price to pay for the use of this system is to bear two basic limitations: the requirement to have all operations to be made cash-only and the inability to claim amortization, depreciation, and deductions for tax purposes. However, during drastic economic downturns, the inability to claim losses and offset accounts on books is a heavy burden. The ability to claim losses due to destruction seems to be the main specific mechanism for the administration of fiscal help at times of disasters in Japan and the USA. For these reasons, the general taxation system may be considered a preferable choice during the war. This could allow a business entity to run with little but sufficient margins and remain within the legal field. Any existing vending business can be enhanced with the use of the business-to-business commission agreements proposed here, and that work as follows: the commissioner is providing the client one cell in a vending machine for rent, and the client sells its goods through that cell. In other words, the commissioner takes the duty to sell goods that belong to the client. This way, the B2B vending-machine business receives a guaranteed income that is comparable to the number of such commission-based vending points out of the entire number of its sales points. Besides that, the company frees a part of its liquidity that can be spent on other needs. From the perspective of the client, the agreement gives the ability to have a vending-machine business for only a fraction of the usual expenses. This means that almost any person in Ukraine may have the financial means to start such a business.