Taxes and taxation

TAXES AND TAXATION

UNIT 22

Comprehension check.

1. What have you learnt about actualizers/fulfillers/believers/achievers/strivers/

experiencers/makers/strugglers?

2. If to take the population of the country, how many people belong to each group?

3. To what group do you (your parents, friends, relatives) belong?

Grammar: Complex Sentences. Types of Clauses: attributive clauses.

Assignment 1. Read and learn the following words and word combinations.

tax – n. податок; v. – оподатковувати, накладати податок;

taxation – оподаткування, стягнення податків;

public goods – товари та послуги для суспільного споживання;

charge – податок, збір, нарахування;

to impose (a tax) – накладати податок; imposition – введення (податку);

to redistribute – перерозподіляти;

fiscal policy – фіскальна (фінансова, бюджетна, податкова) політика;

direct/indirect tax – прямий/непрямий податок;

levy – n.податок, збір; v. – обкладати податком/митом; збирати податок;

personal income tax – податок на особистий прибуток;

corporate income tax – податок на прибуток компанії/корпорації;

collection of taxes – збирання податків;

compulsory – обов’язковий;

contribution – внесок;

general state taxation system –загальна державна система оподаткування;

date of payment – дата оплати;

tax rate – податкова ставка;

tax benefit – податкова пільга;

general state tax – загальний державний податок;

social security tax – податок у фонд соціального страхування;

sales tax – податок з обороту; податок з продаж;

excise duty – акцизний податок;

local taxes and duties – місцеві податки та збори;

parking tax – податок за паркування транспортного засобу;

to issue a release – надавати дозвіл;

the benefit principle – принцип корисності/ вигоди;

tax on vehicle – податок на транспортний засіб;

the ability-to-pay principle – принцип платоспроможності;

the better off – більш забезпечені (верстви населення); заможні;

assessing – оцінювання/визначення розміру податку;

tax liability – податкове зобов’язання;

the State Taxation Administration – Державна податкова адміністрація;

managing taxes – управління податками;

tax implication – відрахування податків;

tax computation – обчислення податків;

tax avoidance – уникнення/ухилення від оподаткування;

tax burden – податковий тягар;

taxpayer – платник податків;

a major concern – основна турбота;

under strict scrutiny – під пильною увагою.

Assignment 2. Read and translate the following text.

It is difficult to imagine a country without a government. Citizens must have a government to provide national defense, a legal system, health service, public education and many other public goods. Governments finance public goods by using taxes. A tax is a charge imposed by the government on people and property for public purposes. Apart from providing public goods for the population taxes make it possible to redistribute income and to influence the overall level of activity in the economy. Applying the correct and timely fiscal policy, i.e. by increasing or decreasing taxes(the source of government revenues) or by increasing or cutting the government spending, the government makes efforts to keep the economy stable and growing.

Taxes can be classified into two types: direct taxes and indirect taxes. A direct tax is a tax paid by the person against whom the tax is levied. Personal income tax is an example of such a tax. Sometimes a person on whom the tax is levied is able to pass the tax on to someone else. This is an indirect tax. An indirect tax is a tax that can be shifted, at least in part, to a party other than the one on whom the tax is levied. Taxes on business often can be shifted to the people who buy the company’s products. It is the consumer who actually pays part of the tax in the price of the good.

Governments at every level are financed by the collection of taxes. Taxation is a system of compulsory contributions levied by the government on persons, businesses, and property used as a source of government spending. The state government activities are supported by general state taxation system with the same mechanism of performance all over the territory of Ukraine: particular dates of payments, tax rates, and tax benefits. General state taxes include personal income tax, corporate income tax, social security tax, sales tax, excise tax, and some others. Each local government (Rada) has the power to determine benefits, rates and dates of payment of local taxes and duties such as advertising tax, parking tax, tax for issuing a release for location of trade and service objects, etc.

There are some basic principles that describe how taxes are distributed among groups of people. The benefit principle of taxation is the concept that those who benefit from the spending of tax money should pay the taxes to provide the benefit. For example, the money collected from taxes on vehicles or parking is used primarily to repair and improve highways. The ability-to-pay principle of taxation is the concept that those who best afford to pay taxes should pay most of the taxes. Generally, the rich or the economically better off can best afford to pay.

Many features of taxation, both in the imposition and collection of taxes, are the same in many countries. In each country there is a special government department which is responsible for assessing individual and corporate tax liabilities. In Ukraine it is the State Taxation Administration of Ukraine.

Managing taxes means recording tax implications of all financial transactions. Businesses try to minimize their taxes, so tax computation has developed into one of the most important branches of accounting. Tax avoidance is a legal way to minimize a tax burden on taxpayers, be it a person or a business. Careful planning designed to decrease the tax liability to the lowest level is thus a major concern of a taxpayer. On the other hand, tax computation is under strict scrutiny of the State Taxation Administration.

Assignment 3. Answer the following questions.

1. What do we call a tax?

2. What is the most important source of revenue for the government?

3. What is referred to as fiscal policy?

4. What purposes do taxes serve?

5. What is the difference between direct and indirect taxes? Give your example of each.

6. How does the taxation system work in Ukraine?

7. What government department is responsible for assessing taxes in Ukraine?

8. What differentiates local duties from general state taxes?

9. How do the benefit principle and the ability-to-pay principle differ?

10. Why is tax computation so important for taxpayers?

11. How can taxpayers minimize their tax burden?

12. Is tax avoidance legal or illegal?

Assignment 4. Read the definitions of words from the text. Write the word in the appropriate column and complete the other two columns.

Definition	Verb	Noun	Person
1. advantage, profit, help	benefit	benefit	beneficiary
2. a person who gives an explanation of money spent
3. bring or gather together; get from a number of people or places
4. ministry, body of persons controlling state affairs
5. restore (something worn or damaged) to good condition
6. manufacture, make, create

Assignment 5. Say whether the following statements are true or false. Correct those you consider to be false.

1. Taxes are used to finance the production of consumer goods. 2. The fiscal policy of the government concerns money supply available in the economy. 3. Taxes are the source of both the government revenues and spending. 4. Indirect taxes are paid by the parties against whom these taxes are levied. 5. Each country has a unique taxation system. 6. The rates of state taxes differ all over the territory of the country. 7. A regressive tax takes the same percentage of income from all taxpayers. 8. Tax computation is controlled by the State Taxation Administration. 9. Tax avoidance is illegal. 10. Tax burden is distributed among people in relation to their level of income.

Assignment 6. Match the terms with their definitions.

Ability-to-pay principle of taxation	A tax that takes a larger percentage of lower incomes and a smaller percentage of higher incomes.
Benefit principle of taxation	A sales tax levied only on specific item.
Corporate income tax	The concept that those who can best afford to pay taxes should pay most of the taxes.
Direct tax	A tax levied on real estate, such as a home, land, and building.
Estate and gift taxes	A tax on goods that are bought.
Excise tax	Taxes levied on the wealth (money and property) passed from one person to another either at death or as a gift.
Indirect tax	A tax that takes a larger percentage of higher incomes and a smaller percentage of lower incomes.
Personal income tax	A tax that provides disability and retirement benefits for most working people.
Progressive tax	A tax paid by the person against whom the tax is levied.
Property tax	The concept that those who benefit from the spending of tax money should pay the taxes to provide the benefits.
Proportional tax	A tax on the income of individuals.
Regressive tax	A tax on the earnings of companies or corporations.
Sales tax	A tax that takes the same percentage of income from all taxpayers.
Social security tax	A tax that can be shifted, at least in part, to a party other than the one on whom the tax is levied.
Tax	A charge imposed by the government on people or property for public purposes.

Assignment 7. Translate into Ukrainian.

A charge imposed by the government on people and property; applying the correct and timely fiscal policy; by increasing or cutting the government spending; the source of government revenues; to pass the tax on to someone else; particular dates of payment; advertising tax; principles that describe how taxes are distributed; those who benefit from the spending of tax money; features of taxation; both in the imposition and collection of taxes; a special government department; a legal way to minimize a tax burden on taxpayers.

Assignment 8. Translate into English.

Забезпечувати державну оборону; народна освіта; фінансувати, використовуючи податки; окрім; впливати на загальний рівень діяльності в економіці; особа, на яку накладено податок; перекласти податок на когось іншого; принаймні частково; сторона, інша ніж та, на яку накладено податок; діяльність уряду країни; механізм виконання; надавати дозвіл на розташування об’єктів торгівлі та послуг; деякі основні принципи; в першу чергу; ті, хто мають найбільшу можливість сплачувати податки; багаті чи заможні; підприємства намагаються мінімізувати свої податки; з іншого боку.

Assignment 9. Find in the text synonymous words, write down the collocations with them as in the example: advantage – benefit, to provide the benefit; tax benefit.

Revenue, protection, operation, inspection, trade, duty, calculation, office, to levy, to transfer.

Assignment 10. Find in the text words with the opposite meaning.

Revenue, direct, maximize, highest, worst, poor, danger, different, on the one hand.

Assignment 11. Compose and translate word partnerships. Cross the odd word out in every line.

1. liability, burden, loyalty, avoidance;

tax 2. computation, implication, collection, stabilization;

3. rate, benefit, money, consumer;

4. sales, excise, air, property.

Assignment 12. What do you think the following people do?

Tax accountant, tax-collector, tax-dodger, tax-payer.

Assignment 13. Read the text to learn how taxes are related to income. Fill the gaps with the proper word from the box below.

ability-to-pay (3), burden, percentage (6), taxpayers, the rich, taxation, the poor

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