What Is an Excise Duty?

Indirect taxes are divided ... general and special taxes ... consumption. The general tax on consumption, value-added tax, or VAT, is levied ... more or less all products and a large number of services. The special taxes on consumption are, ... the other hand, levied on specifically selected products and services. For historical reasons, they are generally known as excise duties.

As far as payments to the state are concerned, it is common to distinguish ... taxes and charges. A charge usually relates to the provision of a particular service or function ... the state. The charges paid to obtain a driving licence or a passport are typical cases.

Payment... a tax does not entail any direct counter-performance ... the part of the state. The revenue from taxation is used – via the state budget-to finance all government activities, including defence and the education system,... instance.

In the case of excise duties, the government does not provide any specific services ... those who pay these taxes. The revenue ... excise duties is stated ... the state budget. Therefore, these excise duties, even though they are sometimes called charges are in reality taxes in the true sense of the word.

Most of the excise duties in Sweden were introduced for other purposes than merely to provide income ... the state. They can, ... fact-in contrast ... other taxes-also be used as instruments to influence consumption patterns in a desirable direction for the society. The introduction of an excise duty is, as a rule, based ... both public finance requirements and other political considerations.

The taxes on energy, spirits, wine and tobacco are typical examples of excise duties used as instruments ... influence. They are also some of the oldest Swedish excise duties. The charge ... pesticides and insecticides is another, more recent example of an excise duty which was introduced to restrict the usage of pesticides and insecticides ... health and environmental reasons.

In Sweden excise duties now account... a significant proportion of the state's revenue. The annual cost to the Swedish government of administering excise duties (personnel, premises, computers, etc.) amounts ... 0.06 per cent of the total revenue from these taxes.

Words you may need:

excise duty акцизная пошлина, акциз

distinguish v проводить различие

relate (to) v быть связанным

entail v влечь за собой

counter-performance n ответное действие

via prep через

amount (to) v достигать, составлять

Ex. 10. Open the brackets putting the verbs in the correct form:

Tax Reform in Developing Countries

In 1985, the government of Jamaica (to embark) on a comprehensive tax reform. This reform (to include) changes in the personal income tax, the company tax, and indirect taxes. The reforms of the personal income tax were particularly profound. A complicated, narrowly-based individual income tax levied under a progressive statutory rate (to replace) by a broadly-based single-rate tax in 1986. Before the reform, the highest marginal tax rate of 60 per cent (including payroll taxes) was reached at the relatively low annual income level of less than three times per capita GDP. The provisions of the tax code were complicated, with no standard deduction and sixteen separate credits. In addition, employers could grant nontaxable allowances to employees. The resulting tax system was difficult and costly to administer and (to contain) important disincentives; evasion and avoidance all but negated the progressivity of the statutory rate structure.

Under the reformed system, the complex rate structure (to replace) with a single rate of 33 1/3 percent; the 16 tax credits were replaced with a standard deduction equal to two times per capita GDP; most non-taxable allowances (to incorporate) into the tax base; and interest income was included in the tax base. Initial results (to suggest) that the combination of a higher standard deduction, a broadened base, and a lower flat rate (to improve) administration, increased the progressivity of the tax system, and raised tax yields.

The government of Indonesia (to adopt) a major tax reform in late 1983. An important aspect of this reform was the wholesale elimination of tax incentives for investment. Before 1983, numerous incentives in the investment code (to design) to favor specific industries, promote exports, develop remote regions, promote technology transfers, strengthen the stock exchange, and even encourage firms to be audited by public accountants. The numerous, and often contradictory, tax incentives created a complicated system unable to fulfil its revenue function or to serve the special purposes originally intended. Further, such incentives (to create) effective tax rates that varied both between and within sectors and thus misallocated the capital stock. Tax reform (to eliminate) nearly all special tax incentives, allowing the company tax rate to be reduced. The simplified incentive system was intended to minimize tax-induced intersectoral preferences, while the lowered company tax rate provided more uniform benefit to all investors.

Words you may need:

embark (on) v приступать к чему-л.

comprehensive adj обширный; масштабный; всеобъемлющий

profound adj глубокий

disincentive n отрицательное воздействие

negate v сводить на нет

statutory adj основанный на законе

incorporate v включать

tax yield налоговый доход

Ex. 11. a) FIB each gap with a suitable word from the box.

b) Sum up the text in 5-7 sentences and present your summary in class.

over	major	taxes	present
intended	times	change	improve
system	businesses	enterprises	register
hampers

Tax Administration

The tax system in Russia has changed significantly_______the past five years. One of the_______ changes has occurred in the institutional structure of the country's tax administration. The Taxation Ministry, which is_______for the administration of all major taxes, was reorganized in 1991.

This institutional_______in the structure of the Ministry has been accompanied by numerous changes of the revenue structure of the_______ . Not only have new_______been introduced (the value-added tax and the expanded property tax, among others), the revenue-sharing arrangements have also been adjusted a number of times over the last five years. Tax rates themselves have changed a number of _______ over the last five years. Additionally, the privatization of_______and the growth of new businesses have left the Ministry with an increased responsibility to locate and_______ taxpayers. The growth in the number of self-employed businesses is particularly problematic because these_______have a higher rate of non-compliance worldwide since locating evaders is difficult.

Computerization is not widespread, which _______ collection efficiency even more, and prosecution against evaders is difficult. Finally, the development of new systems of accounting and audit is necessary to_______the efficiency of tax collection.

Some of the problems in the area of tax administration are new to Russia, such as the development of new enterprises, the change in the structure of the Ministry, development of international systems of accounting, and increased commerce with foreign firms. These problems continue to exist under the_______system of taxation as well.

Words you may need:

tax administration система сбора налогов, налоговое ведомство

self-employed business самостоятельное, некорпоративное предприятие

to locate evaders обнаруживать, выявлять уклоняющихся от уплаты налогов

widespread adj широко распространенный

prosecution n преследование