17.2 Central Bank Payment System

Final products are goods and services at the end of the supply chain. The tax system is automated through the Central Bank Payment System (CBPS). Whenever a resident consumer makes an electronic purchase of a final product, whether produced locally or imported, tax is collected. The tax is automatically distributed to UBI and public services through transfers between Central Bank accounts at the end of each day.

Account types

The Central Bank Payment System provides four kinds of accounts. The type of each account is determined when the account is created.

Every account has one owner. A Non-Citizen who chooses to become a Citizen must first transfer the remaining balance from every G-account they own through the permitted routes and close those accounts, because a Citizen cannot own a G-account.

The four account types have the following properties:

Every C-account is created as either a standard C-account or a private C-account. This privacy setting is permanent. Both kinds have the same economic purpose, transfer rules, and tax treatment; they differ only in how the CBPS handles information about external payments. C-accounts have no Product Category and do not participate in supply chains.

Transfer rules

Green cells are permitted and untaxed, blue cells are permitted and taxed, red cells are blocked, and orange cells are permitted only when the Product Categories of the accounts satisfy the Compatibility Relation. X → Y means a transfer from an X-account to a Y-account.

Internal transfers

An internal transfer is an account-management transfer between two accounts owned by the same Person. It allows an owner to organise their money among accounts that serve different purposes.

Value may move freely and without tax into an owner's B-accounts and C-accounts, and out of their R-accounts, because reorganising the owner's funds is not consumption. Ordinary internal transfers into R-accounts are blocked for the reasons explained below. The permitted routes let the owner commit personal savings to productive activity, reorganise money among business activities, or move business profits into a C-account for later personal spending.

A resident Citizen receives UBI into their nominated C-account and can move that value freely into any of their B-accounts or C-accounts.

A Non-Citizen may also move value from their G-account into their B-accounts or C-accounts without tax. The reverse direction is controlled: transfers from B-accounts and R-accounts into a G-account are blocked, and a transfer from a C-account into a G-account is taxed. This prevents profits generated within the supply-chain system from escaping into the unrestricted G-account economy.

Standard and private C-accounts follow the same internal transfer rules. Information purging applies to private purchases, not to identified movements between accounts belonging to the same owner.

External transfers

An external transfer is an ordinary transfer that is not internal. It normally represents an economic relationship between different owners. A commerce transaction is external even where its source and destination accounts happen to have the same owner.

External B → B and R → B payments represent productive supply-chain relationships. They are untaxed when the Product Categories of the two accounts satisfy the Compatibility Relation. This permits realistic productive trade without giving business accounts unrestricted access to every destination.

External C → R and C → G payments are taxed automatically. When the source is a private C-account, either route provides a private purchase: from a seller using an R-account or from a Non-Citizen seller using a G-account. A Non-Citizen may instead fund their own standard C-account from a G-account and use it to make an identified taxed purchase.

G → G transfers permit unrestricted and untaxed commerce between Non-Citizens. External transfers between the G-account economy and the B-account and R-account supply-chain system are blocked. C → G payments are permitted but taxed, so personal funds cannot enter the unrestricted G-account economy without consumption tax.

It follows that any Person may participate in realistic supply chains through appropriately categorised B-accounts and R-accounts without tax on productive transfers. A Non-Citizen may own such accounts, but cannot move their resulting profits into a G-account. Changing residence, citizenship, account ownership, or business structure therefore does not create a path by which profits in B-accounts or R-accounts become available for consumption without tax.

Why internal transfers into R-accounts are blocked

Ordinary internal transfers into R-accounts are blocked. Because every Central Bank account begins with a zero balance, the only ordinary inflow into an R-account is an external C → R payment on which the CBPS collects consumption tax. A refund into an R-account can only reverse an earlier payment from that same R-account, and an administrative correction is similarly restricted to restoring an earlier debit. It follows that the balance of an R-account consists entirely of proceeds from taxed retail purchases.

This creates a useful invariant without requiring the CBPS to stamp or trace individual units of currency. For example, whenever an import-retail R-account pays a wholesale foreign-currency B-account, the CBPS knows that the payment is funded from taxed retail receipts. The Product Categories and Compatibility Relation establish that foreign currency is a legitimate input to the import retailer, while the R-account type establishes that consumption tax has already been collected. An owner could not defeat this guarantee by moving untaxed value from one of their other accounts into the R-account before making the external payment.

The rule also closes an account-based self-consumption route. A business owner cannot move untaxed value internally into their own R-account and then use the R-account's permitted supply-chain transfers to fund Products for personal consumption. It does not address the separate physical case in which an owner takes a Product from business inventory for personal use.

Retail businesses therefore tend to need both R-accounts and B-accounts. The R-account receives taxable payments from consumers and can use those receipts for compatible business payments. A B-account receives owner funding, loans, gifts, investments, and other permitted internal or productive transfers. When the R-account has insufficient receipts, the business uses its appropriately categorised B-account to acquire inventory and other productive inputs. Consumption tax is collected later when the Product is sold through an external C → R payment.

For example, an import retailer can use an import-wholesale B-account funded with business capital to buy foreign currency and inventory before making any retail sales. Alternatively, after receiving a customer's taxed payment into its import-retail R-account, it can fund that customer's import from the R-account. The first route purchases stock for resale with productive capital; the second uses proceeds on which consumption tax has already been collected.

Refunds, reversals, and administrative corrections are governed by narrow rules that preserve the invariant. A permitted inflow of this kind must restore value previously transferred out of the same R-account, must not exceed that value, and must not create an independently spendable source of untaxed R-account funds. Ordinary internal funding of an R-account remains blocked.