2020-09-24
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0 Tax policies in advanced countries generally favor agricultural over industrial activities. (INDUSTRY)
1 In addition to the revenue function of taxation, taxes may ________ the product-mix generated within the private sector. (ALTERATION)
2 In Great Britain, for example, such commodities as automobiles, household appliances, liquor, and tobacco are made more expensive by taxation, whereas such items as milk, vegetables, meat, cider, and household help are made less expensive, in part through ________, or negative taxes.(SUBSIDE)
3 As a consequence, the British people use rather more of the latter group of commodities and rather less of the ____________(FORMERLY).
4 The tax-induced ___________ in the product-mix comes about through the effects of taxes on prices and quantities produced. (CHANGEABLE)
5 British manufacturers of electric dishwashers, for example, being confronted by a heavy tax on these goods, charge higher prices for them, and so the number these companies can ___________ sell is curtailed. (PROFIT)
6 The labor and capital services not used to produce dishwashers as a result of the curtailed output of them are devoted instead to the _________ of other commodities that are lightly taxed or not taxed at all. (PRODUCE)
7 From the point of view of buyers, this alteration of the product-mix benefits those who happen to like the lightly taxed commodities and injures those who _________ the heavily taxed goods. (PREFERENCE)
8 Whether the entire consuming public as a whole can be said to be better off or worse off as a result of the alteration of the product-mix depends on whether an optimum is defined in terms of consumer preferences as expressed in the market or as expressed through _________ processes. (POLITICS)
Exercise 8.
Match the words (1-4) with their definitions (A-D).
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1. Exemptions A a raw material or primary agricultural product that
can be bought and sold, such as copper or coffee
2. C ommodity B the action of freeing or state of being free from an
obligation or liability imposed on others
3. Utility function C the action of spending funds
4. Expenditures D a mathematical function that ranks alternatives
according to their utility to an individual
UNIT EXTENSION
Exercise 9. Two-minute presentation.
Choose one of the following subjects about functions of taxation and prepare to give a two-minute presentation about it to the group.
· Functions and purposes of taxation
· Taxation functions as a social practice
· The role of fiscal function in the formation of the state budget
· The fiscal function as the main function of the taxation
· The hierarchy and ranking of tax functions
· Redistribution function of taxation and its features
· Regulation and taxation
· Controlling function of taxation
· Promoting function of taxation
· Taxation and fiscal policy
· Taxation policy and development
· Taxation and fiscal policy in English-speaking and Asian countries
· Taxes as fiscal weapons
· Taxes as fiscal devices
PART 2
TOPIC FOCUS: Key Taxation Vocabulary
Discuss these questions with a partner.
1. What government authority is in charge of collecting taxes in your country?
2. What information does a taxpayer report on a personal income tax return?
3. What is the maximum amount of personal income not subject to taxation in your country?
4. What tax measure do governments adopt to attract foreign investors?
5. What are tax deductible expenses?
6. What criteria must tax deductible expenses meet in order to be recognized by tax authorities?
7. How can governments use tax deductions to promote specific practices?
The basic role of any accountant is to assist clients with tax return preparation. A tax return is a form on which a taxpayerreports details of his taxable income and claims tax allowances and tax reliefs.
The total amount of tax owed is called tax liability. It is calculated by applying a tax rateto a tax base. The rate is set by the government’s ministry of finance, which imposes and leviestaxes. The UK government department that administers and collects taxes is HM Revenue and Customs, while the government agency responsible for tax collection and tax law enforcementin the USA is Internal Revenue Service.
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Not all taxpayer’s income is subject to taxation – a part of it is tax-free. Generally, taxpayers are entitled to a tax-free personal allowance, which is the amount subtracted from the income before it is taxed. Governments also offer other forms of tax allowances, which are concessions used to reduce a company or individual’s taxable income. In some countries, the government policy allows certain groups of organizations, such as charities, cultural or educational organizations to be exempt from paying tax. Furthermore, a taxpayer who has paid an excess amount of income tax is entitled to a tax refund (or tax rebate).
In order to promote a specific behaviour, or help disadvantaged taxpayers, governments may grant tax credits. Unlike deductions and exemptions that reduce the amount of taxable income, tax credits reduce the actual amount of tax owed.
For the purpose of spurring economic growth, governments sometimes offer various forms of tax reliefs. A tax relief is any programme or incentive that reduces the amount of tax owed, typically used by governments to attract foreign investors.
Exercise 1.
In the text, find the answers to the following questions.
1. How is tax liability calculated?
2. What government authority is in charge of setting a tax rate?
3. Is the entire amount of a taxpayer’s income subject to taxation?
4. What happens when a taxpayer pays too much tax?
5. Why do governments offer tax credits?
6. What is the difference between tax credits and tax deductions?
7. Why do governments offer tax reliefs?
