Assignment 3. Read and translate the text using a dictionary.

WHAT ARE TAXES?

Taxes are a compulsory financial contribution by a person or body of persons towards the expenditure of a public authority. In modern economies taxes are the most important source of government revenues. Taxes on income (i.e. on wages, salaries, profits, dividends, rent and interest) and on capital are known as "direct" taxes. Taxes on commodities or services are known as "indirect" taxes.

Taxes are considered to have three functions:

(a) fiscal or budgetary, to cover government expenditure, to provide the public authorities with the revenue required for meeting the cost of defence, social services, interest payments on the national debt, municipal services, etc.;

(b) economic, to give effect to economic policy, to promote stable economic growth, to influence the rate of economic growth of the nation;

(c) social, to increase the economic welfare of the community, to lessen inequalities in the distribution of income and wealth.

Businesses and individuals are subject to many forms of taxes. The various forms of business organization are not taxed equally. The tax situation is simplest for proprietorships and most partnerships; corporations or companies are treated differently.

Under Russian law, all Russian legal entities, whether they have foreign investment or not, are subject to the profit tax law. Juridical persons involved in entrepreneurial activities pay 6,5% to the federal budget and 17,5% to the regional budget. Along with the profit tax, enterprises pay value-added tax (VAT), excise tax, property tax and other local taxes. They also pay charges to the Pension Fund, Employment Fund, and Social Insurance and Medical Insurance Funds.

Russian taxes provide revenue for three tiers of the budget: federal, regional and local. The major taxes paid to the budget are: profit tax; value-added tax (VAT); securities tax; withholding tax. 18% VAT and excise are indirect taxes which are levied on transactions and are included into the selling price. They are paid by consumers and not by producers. A reduced rate of 10% is applicable to foodstuffs and goods for children.

The Russian^, government tries to create a climate in which business can thrive, to keep the tax burden as low as possible. It also attempts to eliminate tax allowances, which deprive the budget of tax revenues, and to improve tax collection.

Tax returns for Russian legal entities are audited by the tax authorities at the time they are submitted..

Along with cases of illegal evasion of tax obligations there are entirely legal ways of avoidance by which a person may so arrange his affairs as to minimize, or even eliminate, tax liability on his property and income.

Assignment 4. Find English equivalents to the following phrases in the text:

группа людей; на расходы органов государственной власти; налоги на товары и услуги; для обеспечения (покрытия) правительственных расходов; чтобы покрыть расходы на оборону; государственный долг; чтобы обеспечить стабильный экономический рост; темпы экономического роста; экономическое благосостояние общества; сократить неравенство; подчиняются закону о налоге на прибыль; занимающиеся предпринимательской деятельностью; вместе с налогом на прибыль; оплачиваются потребителями; льготная ставка; три уровня бюджета; бизнес может процветать; снизить (сократить) налоговое бремя; сократить налоговые льготы; налоговая декларация; помимо случаев ….. существуют

Assignment 5. Complete the sentences in column A choosing the proper ending from column B:

A B

1) Taxes are the most important source a) indirect taxes.

of ……………..

2) Taxes on income and capital are b) promote stable economic growth

known as ………….. and influence the rate of it.

3) Taxes on commodities and services c) deprive the budget of tax

are called ………….. revenues.

4) Taxes fulfill a fiscal or budgetary d) profit tax, VAT, securities tax

function: they cover ………….. and withholding tax.

5) The economic function of taxes is e) tax authorities

to ……………

6) The social function of taxes is to … f) government revenues.

……………

7) The major taxes paid to the budget g) direct taxes.

are …………..

8) The government tries to eliminate h) government expenditures, provide

tax allowances, because they …… the revenue for meeting the cost of

defence and social services.

9) Tax returns for legal entities are i) increase economic welfare of the

audited by ………….. community.

Assignment 6. Answer the questions on the text:

1)What are taxes?

2) What taxes are called “direct” and “indirect”?

3) What are the purposes of direct and indirect taxation?

4) What are the main functions of taxes? Characterize briefly each of them.

5)Are businesses taxed equally?

6) What taxes are paid to the federal budget?

7) How much do legal entities pay to the federal budget and to the regional

budget?

8) What charges do juridical persons pay?

9) How do VAT and excise tax differ from other taxes?

10) What bodies collect taxes?

11) Why does the Russian government try to eliminate tax allowances?

12) What is the difference between tax evasion and tax avoidance?

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