Meilisa - Meeting 3

2.
Taxation
2a. Discussion
1. Income Tax – Tax paid on the income of individuals or companies.
2. Value Added Tax (VAT) – Tax imposed on the sale of goods and services.
3. Property Tax (Land and Building Tax) – Tax levied on the ownership of land and buildings.
4. Excise Tax – Tax imposed on specific goods such as alcohol and tobacco.
5. Motor Vehicle Tax – Tax levied on the ownership of motor vehicles.
6. Inheritance Tax – Tax imposed on inherited assets after someone passes away.
7. Sales Tax – Tax imposed on the sale of specific goods.
8. Environmental Tax – Tax levied on activities that harm the environment.
9. Import Tax – Tax imposed when importing goods from other countries.
10. Export Tax – Tax imposed when exporting goods to other countries.
2b. Vocabulary
Which terms do the following sentences define?
1. The tax people pay on their wages and salaries is called

A capital transfer tax B income tax C wealth tax
2. A tax on wages and salaries or on company profits is a/an
A direct tax B indirect tax C value-added tax
3. A tax levied at a higher rate on higher incomes is called a
A progressive tax B regressive tax C wealth tax
4. A tax paid on property, sales transactions, imports, and so on is a/an
A direct tax B indirect tax C value-added tax
5. A tax collected at each stage of production, excluding the already-taxed costs from previous
stages, is called a/an
A value-added tax B sales tax C value-added tax
6. Profits made by selling assets are generally liable to a
A capital gains tax B capital transfer tax C wealth tax
7. Gifts and inheritances over a certain value are often liable to a
A capital gains tax B capital transfer tax C wealth tax
8. The annual tax imposed on people's fortunes (in some countries) is a/an
A added-value tax B capital gains tax C wealth tax
9. Making false declarations to the tax authorities is called
A fiscal policy B tax avoidance C tax evasion
10. Reducing the amount of tax you pay to a legal minimum is called
A creative accounting B tax avoidance C tax evasion
2c Reading
Read the text and decide which paragraphs could be given the following headings.
Paragraph B Advantages and disadvantages of different tax systems
Paragraph E Avoiding tax on profits
Paragraph D Avoiding tax on salaries
Paragraph C Tax evasion
Paragraph A The functions of taxation
2d Comprehension
According to the text, are the following statements TRUE or FALSE?
1. Taxes can be designed both to discourage and to encourage spending.

True
Taxes can be designed to discourage certain behaviors (e.g., smoking) and encourage others (e.g.,
capital investment).
2. The same amount of money can be taxed more than once.
True
Business profits can be taxed twice, once as corporate tax and then as income tax on dividends.
3. Progressive taxes may discourage people from working extra hours.
True
Progressive taxes, with high marginal rates, can discourage people from working or investing
more.
4. Sales taxes are unfair because poor people spend more than the rich.
False
The text mentions that sales taxes are slightly regressive, but it doesn't say they are entirely
unfair because the rich still pay a lower proportion of their income on consumption compared to
the poor.
5. The Italian government knows that about one seventh of national income escapes taxation.
False
The Director of the Italian National Institute of Statistics added 16.7% to Italy's GNP to account
for the underground economy, which is more than one seventh.
6. 'Loopholes' are a common form of tax evasion.
False
Loopholes are legal ways of avoiding tax, not tax evasion, which is illegal.
7. If you pay a lot of your income into a pension fund or a life insurance policy you never have to
pay tax on it.
False
Paying into a pension fund or life insurance policy allows individuals to postpone paying tax, but
they may still have to pay tax later.
8. A company that makes an unusually large profit during a tax year might quickly decide to spend
it, for example, on a new factory or equipment.
True
Companies can bring forward capital expenditure to reduce taxable profits for a given year.

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2.

1. Income Tax – Tax paid on the income of individuals or companies.

5. Motor Vehicle Tax – Tax levied on the ownership of motor vehicles.

7. Sales Tax – Tax imposed on the sale of specific goods.

8. Environmental Tax – Tax levied on activities that harm the environment.

Which terms do the following sentences define?

1. The tax people pay on their wages and salaries is called

Paragraph B Advantages and disadvantages of different tax systems

Paragraph E Avoiding tax on profits

Paragraph D Avoiding tax on salaries

Paragraph C Tax evasion

Paragraph A The functions of taxation

According to the text, are the following statements TRUE or FALSE?

1. Taxes can be designed both to discourage and to encourage spending.

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