English_for_Finance_and_Banking
¨ READ AND DISCUSS
- a) Supply the articles where necessary.
b) Write down 3-5 questions about the text.
c) Say if you have learned about the system of tax administration in the UK.
The British Government's programme of tax reform has sought to maintain ... climate in which business can thrive and individual initiative is rewarded. Its major aims are … following: to keep … tax burden as low as possible through firm control over public expenditure, to maintain … broad tax base, which helps to keep tax rates low, and to shift the balance of taxation from taxes on income to taxes on expenditure. Steps have also been taken to close tax loopholes. The government is committed to simplifying ... .administration of ... tax system, both for individuals and for companies. The government admits that there are four general principles for ... efficient administration of tax system; ... clarify, continuity, cost-effectiveness and convenience.
At present, the Inland Revenue assesses and collects ... taxes on income, profits and capital, and stamp duty.
Taxes on individual incomes are generally progressive in that larger incomes bear ... greater amount of tax.
In general, income tax is charged on all income which originates in … Britain and on all income arising abroad of people resident in Britain. Some forms of income, however, are exempt.
Britain has entered into … agreements with many countries to provide relief from double taxation. Most wage and salary earners pay their income tax under a Pay-As-You-Earn (PAYE) system whereby is deducted and accounted for to the Inland Revenue by the employer
The rates of company tax in Britain are lower than in … most other industrialized countries. A company which distributes profits to its shareholders is required to pay advance corporation tax (ACT) on these distributions to ... Inland Revenue.
Words you may need:
reward – нагороджувати
tax base – податкова база
loophole – лазівка
stamp duty – гербовий збір
charge – стягувати
advance corporation tax – авансовий корпоративний податок
2. a) Supply prepositions where necessary.
b) Write down 3-5 questions about the text.
c) Explain the functions performed by excise duties.
What Is an Excise Duty?
Indirect taxes are divided ... general and special taxes ... consumption. The general tax on consumption, value-added tax, or VAT, is levied … more or less all products and a large number of services. The special taxes on consumption are, … the other hand, levied on specifically selected products and services. For historical reasons, they are generally known as excise duties.
As far as payments to the state are concerned, it is common to distinguish … taxes and charges. A charge usually relates to the provision of a particular service or function ... the state. The charges paid to obtain licence or a passport are typical cases.
Payment... a tax does not entail any direct counter-performance the part of the state. The revenue from taxation is used – via the state budget – to finance all government activities, including defence and the education system, … instance.
In the case of excise duties, the government does not provide any specific services … those who pay these taxes. The revenue .. excise duties is stated .. the state budget. Therefore, these excise duties, even through they are sometimes called charges are in reality taxes in the true sense of the word.
Most of the excise duties in Sweden were introduced for other purposes than merely to provide income … the state. They can, … fact – in contrast … other taxes – also be used as instruments to influence consumption patterns in a desirable direction for the society. The introduction of an excise duty is, as a rule, based .. both public finance requirements and other political considerations.
The taxes on energy, spirits, wine and tobacco are typical examples of excise duties used as instruments ... influence. They are also some of the oldest Swedish excise duties. The charge … pesticides and insecticides is another, more recent example of an excise duty which Was introduced to restrict the usage of pesticides and insecticides ... health and environmental reasons.
In Sweden excise duties now account... a significant proportion of the state's revenue. The annual cost to the Swedish government of administering excise duties (personnel, premises, computers, etc,) amounts ... 0.06 per cent of the total revenue from these taxes.
Words you may need:
excise duty – акцизний збір, акциз
distinguish – проводити відмінність
relate (to) – бути пов’язаним
entail – волоти за собою
counter-performance – дія у відповідь
via – через
amount (to) – досягати, складати
3.Open the brackets putting the verbs in the correct form:
Tax Reform in Developing Countries
In 1985, the government of Jamaica (to embark) on a comprehensive tax reform. This reform (to include) changes in the personal income tax, the company tax, and indirect taxes. The reforms of the personal income tax were particularly profound. A complicated, narrowly-based individual income tax levied under a progressive statutory rate (to replace) by a broadly-based single-rate tax in 1986. Before the reform, the highest marginal tax rate of 60 per cent ( including payroll taxes) was reached at the relatively low annual income level of less than three times per capita GDP. The provisions of the tax code were complicated, with no standard deduction and sixteen separate credits. In addition, employers could grant nontaxable allowances to employees. The resulting tax system was difficult and costly to administer and (to contain) important disincentives; evasion and avoidance all but negated the progressivity of the statutory rate structure.
Under the reformed system, the complex rate structure (to replace) with a single rate of 33 1/3 percent; the 16 tax credits were replaced with a standard deduction equal to two times per capita GDP; most non-taxable allowances (to incorporate) into the tax base; and interest income was included in the tax base. Initial results (to suggest) that the combination of a higher standard deduction, a broadened base, and a lower flat rate (to improve) administration, increased the progressivity of the tax system, and raised tax yields.
The government of Indonesia (to adopt) a major tax reform in late 1983. An important aspect of this reform was the wholesale elimination of tax incentives for investment. Before 1983, numerous incentives in the investment code (to design) to favor specific industries, promote exports, develop remote regions, promote technology transfers, strengthen the stock exchange, and even encourage firms to be audited by public accountants. The numerous, and often contradictory, tax incentives created a complicated system unable to fulfil its revenue function or to serve the special purposes originally intended. Further, such incentives (to create) effective tax rates that varied both between and within sectors and thus missallocated the capital stock. Tax reform (to eliminate) nearly all special tax incentives, allowing the company tax rate to be reduced.
The simplified incentive system was intended to minimize tax-induced intersectoral preferences, while the lowered company tax rate provided more uniform benefit to all investors.
Word you may need:
embark (on) – приступати до чогось
comprehensive – масштабний, всеохоплюючий
profound – глибокий
disincentive – негативний вплив
negate – зводити нанівець
statutory – той, що спирається на закон
incorporate – включати
tax yield – податковий прибуток
4.Read the text below carefully and underline the parts of it giving basic ideas about the desired features of a tax system.
Tax System Design
Recent studies have singled out some of the desired features of the tax system that should emerge as countries develop. They are as follows:
= Concentration of revenue sources. A system that raises revenue from a limited number of taxes and rates may substantially reduce administration and compliance costs. Avoidance of numerous taxes may also facilitate the assessment of the effects of policy changes and avoid an impression of excessive taxation.
= Broad and objectively defined tax bases. A broad tax base with limited exemptions enables revenue to be raised with relatively low rates. Substantial erosion of the tax base through exemptions requires much higher rates to achieve a given amount of revenue. Tax bases should be defined so as to ensure that producers and consumers can clearly estimate their tax liability when they plan activities.
= Minimization of collection lags. In an inflationary environment the real value of tax receipts may decline substantially when there are long legs in payments. High penalties are necessary to ensure that legal delays are not compounded by delinquency lags.
= Tax neutrality. The tax system should finance government operations with the least cost and disturbance to the patterns of production, and the generation and use of income. Hence, neutrality of the tax system is considered desirable, in the sense that distortions in incentives should be limited unless there are compelling reasons to discourage the production, consumption or trade of a particular commodity. The activity, most profitable before tax, should remain most attractive after tax.
Words you may need:
administration costs – витрати, пов’язані із збиранням податків
compliance costs – витрати, пов’язані із забезпеченням дотримання податкового законодавства
tax liability – податкові зобов’язання
lag – запізнювання, розрив
penalty – штраф
compound – ускладнювати, збільшувати
delinquency – правопорушення
neutrality – нейтральність
disturbance – порушення
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