Fill in the spidergram with the words associated with Taxation and Audit

Discuss.

1. What does the word “tax” mean? What kind of taxes do you know? Where do taxes taken by governments go to?

2. Do you think all people should pay equal taxes? How much is income tax in Russia now? In your opinion, is it fair when oil and gas companies pay taxes on the usage of natural resources? Why? Why not?

Terms and Vocabulary

distinction taxes direct taxes revenue authorities   incidence income tax vehicle excise duty indirect taxes burden elasticity of demand demand curve to recoup to assert individual tax collection cost capital gains tax controversial progressive regressive proportionate flat rate to distort deliberate demerit goods pricing policy foreign trade to levy profligate principle of non-distortion willingness value marginal rate alteration expenditure RPI (Retail Prices Index)

различие налоги прямые налоги департамент налогов и сборов, финансовое управление снижение налогового бремени подоходный налог акцизный сбор с транспортного средства косвенные налоги налоговое бремя, расходы эластичность спроса кривая спроса возместить утверждать налог физических лиц затраты на взыскание налог на прирост капитала противоречивый пропорционально увеличивающийся регрессивный соразмерный, пропорциональный единая ставка, цена без начисления процентов искажать, изменять спланированный, взвешенный недостаточные товары ценовая политика внешняя торговля облагать налогом, взимать неэкономный, расточительный принцип невмешательства   желание ценность предельная налоговая ставка изменение, перемена затрата, трата, расход(ы) индекс розничных цен

Exercise 1. Read the text and do the exercises.

Taxation

The traditional distinction between, or classification of, taxes is to call them direct or indirect. Direct taxes are ones where the individual who pays the tax to the revenue authorities also bears the loss or incidence of the tax. Income tax is the clearest example but there are problems with the classification and it is not very useful. Vehicle excise duty is, for example, a direct tax on a private car owner who pays for the car out of his or her own pocket but if the tax is paid by a business it can be recovered wholly or in part via the prices charged to customers and is indirect.

Indirect taxes are ones where the individual or firm that pays the tax to the revenue authorities can pass on some or all of the burden, loss or incidence of the tax to other people. The manufacturer pays the tax but recovers some of it from the distributors, wholesalers and retailers, who in turn raise their prices so that the final customer bears some of the incidence. The public often believes that the whole of the tax burden is passed on but if there is any elasticity of demand at all, that is the demand curve is not vertical, the manufacturer and distributors suffer a loss of sales and profit when they try to raise their prices to recoup the tax. Thus the incidence, or loss, of an indirect tax is normally shared by three groups, manufacturer, retailers and wholesalers and final purchaser.

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