Central and commercial banks

Taxation

Taxes are compulsory financial contributions to the budget. Taxes are the most important source of government revenue. Taxes on income and capital are direct, taxes on goods and services are indirect. Taxes have three functions:

- to cover government expenses,

- to increase economic welfare of the country,

- to promote stable economic growth.

Taxes can play fiscal, economic and social functions. Taxes provide revenues for local, regional and national budgets. We pay income, profit, excise, property, corporate taxes, value added tax and charges to Pension Fund, Employment Fund, Social and Medical Insurance Fund. Many countries have problems with taxation such as high tax rates and tax avoidance. Tax reforms must melude tax benefits, tax breaks, tax heavens and equitable tax distribution.

Financial plan.

Financial plan is an annual project for the company. The task of financial planning is to estimate future income, expenses and assets available and find effective ways of raising capital. The financial plan includes resources, equipment and inventory necessary to achieve the company goals. The plan is based on the main financial statements: the balance sheet, the cash flow statement and income statement. Financial plan includes revenue plan, expenditure plan and credit plan. The task of the Financial Manager is to describe the available and expected resources for the definite period of time. They must calculate ­necessary costs, identify all risks and develop the realistic budget.

Investment climate.

Investment climate include combination of economic and political factors that influence

development of international business.Investment climate can be favorable and unfavorable,

in other words attractive and unattractive. We can name push and pull factors stimulating

foreign investments. Pull factors include tax benefits, special economic zones, democratic

laws, political stability, cheap labor. Push factors include high inflation and interest rates

weak national currency, economic and political instability.

Central and commercial banks

Modern banking system includes the central bank and commercial banks. Central banks function for the government and other banks, not for private customers. They develop and implement the monetary policy and supervise over the banking system. They control the money supply, fix the minimum interest rates, issue coins and bank notes, influence exchange rates and act as lenders of last resorts to commercial banks with liquidity problems. Commercial banks offer a full range of financial services for individual and corporate clients. They accept deposits, provide cheque facilities, grant loans, arrange overdraft facilities, make transactions with currency and securities. Commercial banks act as, financial intermediaries on behalf of their clients. Modern tendencies in banking include merging of banks in financial supermarkets with retail and wholesale services.

Дата добавления: 2015-11-16