III. Agree or disagree with the statements:

1. All products and services have prices.

2. A price depends on two factors: credit terms and delivery.

3. Prices were set by sellers and banks.

4. Through deal- making process sellers and buyers settled a reasonable price.

5. The necessity of setting one price for all buyers arose with the development of large- scale retailing at the end of the 19^th century.

6. Companies handle pricing in a variety of ways.

7. Prices play an important role in all economic markets.

8. In industries where pricing is a key factor, companies often establish a pricing department to set prices or assist others in determining appropriate prices.

9. Prices are fixed in most economic systems.

10. Sales managers, production managers, finance managers and accountants influence the pricing.

IV. Answer the questions:

1. Which factors does a price depend on?

2. How were prices set long ago?

3. Why did the necessity of setting one price for all buyers arise?

4. How do companies handle pricing?

5. What role do prices play in all economic markets?

V. Match the first part of the sentence (1-5) with the second one (a-e):

1	In small companies prices are often set by top management	a	with the development of large-scale retailing.
2	Companies handle pricing	b	for example, credit terms, delivery, trade-in-allowance, quality etc.
3	The necessity of setting one price for all buyers arose	c	in a variety of ways.
4	Prices were set by buyers and sellers	d	rather than by the marketing or sales department.
5	A price depends on different factors,	e	communicating with each other.

3. Make up a plan of the text.

Unit 14

Taxation

What are taxes?

I. Read, translate and memorize the following words:

taxation, compulsory, commodity, expenditure, authority, defense, completion, return, submit, prevent, impose, submit, appeal, assessments, withholding, evasion, avoidance, securities, increase.

II. Read and translate the text.

Taxes are the 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 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 subjects 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.

In the United States of America nearly all of the federal government’s revenues come from taxes. By far the most important source of tax revenue is the personal income tax. Gross receipts from corporate income taxes yield a far smaller percentage of total federal receipts. Individual states levy their own taxes. As a result, for example, the profits of a corporation are liable to federal and sometimes state corporate income taxes. This often imposes a double tax burden. When the after-tax income is paid out to stock-holders as dividends, it is then taxed again as personal income.

In the United Kingdom there is no single code of tax law, the body of tax legislation being increased by each year’s Finance Act¹.

The United Kingdom operates a “schedular” system², where’by taxable income from different sources is calculated and taxed under the rules of a particular “schedule”.

Tax assessments are normally based on returns by the Board of Inland Revenue (referred to simply as “Inland Revenue”) for completion by the taxpayer. While companies may receive tax return, they normally submit instead a copy of their annual accounts together with a computation of taxable profits.

The United Kingdom does not yet operate a system of self-assessments for tax on income and capital gains, but it is being introduces at the moment.

Under Ukrainian law, all Ukrainian legal entities, whether they have foreign investment or not, are subject to the profit tax law. Foreign entities that have a taxable permanent establishment in Ukraine are also taxed under this law.

Ukrainian taxes provide revenue for two tiers of the budget: national and local. The major taxes paid to the budget are: tax on income, tax on wages, profit tax, excise duty, state duty, value added tax (VAT) and others.

In Ukrainian government tries to create the 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 in Ukrainian legal entities are audited by the tax authorities at the time they are submitted.

If the company or a person assessed believes the assessment is incorrect in any way, an appeal may be lodged against it. The appropriate financial organ is required by law to reply to such an appeal within five days.

When a company resident in one country receives income or gains from source in another, or when shareholders and company are domiciled in different countries it is possible that incomes arising will be taxable in each country, i.e. taxed twice.

A number of countries have problems because of significant taxpayer non-compliance.

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.

Comments

¹the body of tax legislation being increased by each year’s Finance Act – причому податкове законодавство розширюється за рахунок нових податків, що вводяться щорічно при прийнятті фінансового акту.

²The United Kingdom operates a “scheduler” system…– У Великобританії існує система „шедул”...