TAXATION PROFESSIONAL ENGLISH IN USE FOR FINANCE

 

PROFESSIONAL ENGLISH IN USE FOR FINANCE 49. TAXATION

 

A Direct taxes Governments finance most of their expenditure by taxation. If they spend more than they levy or charge in taxes, they have to borrow money. Direct taxes are collected by the government from the income of individuals and business. ·         Individuals pay income tax on their wages or salaries, and most other money they receive. ·         Most countries have a capital gains tax on profits made from the sale of assets such as stocks or shares. This is usually imposed or levied at a much lower rate than income tax. B Indirect taxes Indirect taxes are levied on the production or sale of goods and services. They are included in the price paid by the final purchaser. ·         In most European countries, companies pay VAT or value-added tax, which is levied at each stage of production, based on the value added to the product at that stage. The whole amount is added to the final price paid by the consumer. In Canada, Australia, New Zealand and Singapore, this tax is called goods and services tax or GST. C Non-payment of tax To reduce the amount of income tax that employees have to pay, some employers give their staff advantages instead of taxable money, called perks, such as company cars and free health insurance. EXERCISES 49.1 What are the standard names for the tax or taxes paid on the following? Look at A and B opposite to help you. 1 alcoholic drinks and tobacco products 2 company profits 3 goods bought in stores 49.2 Finds words in A and B opposite with the following meanings. 1 an adjective describing taxes on revenue or income 2 a tax that has one rate that is the same for everybody 3 money paid by the government to sick and unemployed people 49.3 Are the following statements true or false? Find reasons for your answers in A, B and C opposite. 1 Capital gains are generally taxed at a higher rate than income. 2 The same sum of money can be taxed more than once. 3 Sales taxes can be both proportional and progressive at the same time. 49.4 Find five verbs in A and B opposite that can be used to make word combinations with ‘tax’.

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