Comprehension

1. Answer the following questions.

1. What is taxation?

2. Direct taxes are collected by the government from the income of individuals and businesses, aren’t they?

3. What direct taxes do you know?

4. What is the difference between an income tax and a capital gains tax?

5. What tax do companies pay?

6. Which tax does the government use to finance social security spending?

7. What are indirect taxes levied on?

8. What is VAT based on?

9. Are there any special taxes?

10. What taxes can be called progressive and regressive?

Vocabulary

2. Match the type of tax with the definitions below.

1) capital gains tax	a) a tax on money received from salary, investments, rent
2) income tax	b) a consumption tax which is levied at each stage of production based on the value added to the product at that stage
3) corporation tax	c) a tax that takes a larger percentage from low-income people than from high-income people
4) excise duties	d) a tax that takes a larger percentage from the income of high-income earners than it does from low-income individuals
5) value added tax	e) taxes imposed on specific products such as petrol, tobacco, alcohol
6) progressive tax	f) a tax imposed on those who inherit assets from a deceased person
7) inheritance tax	g) a tax on company’s profit
8) regressive tax	h) a type of tax levied on capital gains incurred by individuals and corporations

3. What are the standard names for the tax or taxes paid on the following?

1. alcoholic drinks and tobacco products

2. company profits

3. goods bought in stores

4. money received from relatives after their death

5. salaries and wages

6. goods made in other countries

7. money made by selling stocks at a profit

4. Find words in the text with the following meanings.

- an adjective describing taxes on revenue or income

- a tax that has one rate that is the same for everybody

- money paid by the government to sick and unemployed people

- a tax that has a higher rate for taxpayers with a higher income

- an adjective describing taxes on consumption or spending

5. Fill in the correct words from the list below.

Indirect, national insurance, income, tax system, Value Added Tax, excise duty, inheritance

1. ………. tax is paid in relation to how much you earn.

2. ………. tax is charged on goods and services rather than on the money that people earn.

3. ……….. tax is paid from money you have received from someone who has died.

4. In Britain, …….. is a system in which the money collected is given to people who are too old or ill to work.

5. ………. is raised on products such as tobacco and alcoholic drinks.

6. ………. is paid to the government on goods and services and can be reclaimed by retailers.

7. ……….. is a legal system for assessing and collecting taxes.