Ex. 16. Scan several business newspapers and make conclusions about the attitude of businessmen to the presence of foreign banks in Russia.

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Ex. 16. Scan several business newspapers and make conclusions about the attitude of businessmen to the presence of foreign banks in Russia.


Ex. 17. Read the article below quickly to find out the functions the discount market performs.

The Discount Market


The discount market is the fusion of the London markets for sterling money-market security and short-term sterling deposits in the operations of the discount houses.

For many years it was synonymous with the London money market but with the rise to prominence of the parallel markets it became known as the "traditional" money market in comparison especially with the interbank market in sterling funds. The discount market is a comparatively recent development in English monetary history. Its origins lie in the London bill market of the early 19th century.

Now this market in short-term financial instruments consists of ten big discount houses, who are members of the London Discount Market Association, and simple bill-brokers (discount houses) who do not have a large portfolio. Through this market the Bank of England fine-tunes the nation's money supply.

The participants in the market specialize in "bill-broking" form of banking, i.e. the provision of short-term money by way of discounting bills to borrowers. Some twenty years ago much of the discount market's business was in treasury bills. Now the market deals in a wider range of short-term assets, in particular, bank bills and certificates of deposit. Generally speaking, the discount market performs the same function for the banks as the banks themselves perform for their clients: it employs profitable funds which are temporarily unused by banks and other financial houses. It participates substantially in the financing of the short-term requirements of the government by buying Treasury Bills; it holds short-term government bonds and thereby carries some of the Government's unfunded debt; and it accepts and discounts bills of exchange, thereby financing short-term commercial operations and foreign trade.

Words you may need:

discount marketучетный рынок

fusionn (зд.) слияние, объединение

prominencen важность, значимость

bill marketрынок векселей

fine-tunev (букв.) «точно настраивать» (регулировать колебания рыночных тенденций)

"bill broking"учет векселей

unfunded debtсрочный долг, текущая задолженность

Ex. 18. Look through the text and name the facts which are new to you.


A crucial aspect of the development of a country's domestic banking system and financial markets is the payment system, which is used by enterprises and individuals to discharge obligations incurred in a market economy. Payment systems are the foundations on which a stable and efficient economy can be built. The principal objective of the payment system is to support the country's economy. Moreover, the payment system is one of the first places where financial stress will manifest itself, as firms in financial difficulty fail to meet their payment obligations.

The payment system is the apparatus through which obligations resulting from economic activity are discharged by transfers of monetary value. Obligations can be discharged through the payment system using cash or deposits held in banks. In the case of payments made using bank deposits, it is necessary to use some form of payment instrument, such as a paper or electronic credit or debit payment, to move funds. For a debit payment, such as a check, the receiver of money (the payee) initiates an instruction to the bank holding the deposit of the sender of money (the payer), ordering the paying bank to pay. This is done by presenting a check, which must be honoured by the payer, who is the customer of the paying bank, once the check is authenticated.

For a credit payment, such as a payment order, the party making the payment initiates an instruction to his bank to pay money to the intended receiver by initiating a payment order.

When using deposit money in banks to make payment, the process for discharging an obligation can be divided into two parts. The first part is clearing, the process by which payment information is conveyed between the payer and payee and between the banks holding the accounts of the two parties to the transactions. Once a payment is initiated, clearing should take place quickly and reliably in order to minimize financial risk as funds are being transferred. Commercial banks play an important role as intermediaries in the clearing process because they provide account services to the public.

The second part of the process for discharging an obligation using deposit money in banks is settlement, in which the actual transfer of monetary value associated with the payments is made. Banks play a role in settlement because it is through the accounts held on their books that the transfer of monetary value occurs. Commercial banks settle for the non-bank public and sometimes for other banks with which they have correspondent account relationships.

The central bank, where all commercial banks hold accounts, is often used by commercial banks as the settlement entity for interbank transfers.

Clearing and settling payments can be complex. Therefore, an efficient payment system requires a high degree of cooperation and coordination among banks, which usually occurs through a clearing house. A clearing house is a legal entity, owned and controlled jointly by its member banks. Its primary function is to coordinate the exchange and settlement of payments among its members.

The activities of the clearing house might be limited simply to coordinating the physical exchange of payments among banks, for example, by organizing efficient and speedy transportation of payment documents. Clearing houses may also provide processing services to their members, in which case they may operate fairly large data processing and data communications systems to process payment instructions. Payment systems face a number of risks, like liquidity risk, credit risk, cross-currency settlement risk and systemic risk.

Thus, confidence in a payment system is crucial in a market economy. In the long term each country is likely to need a safe and efficient payments system for households; legislation governing payments; and a sound financial sector, including financially and operationally sound banks.

Words you may need:

crucialadj решающий, критический

to discharge obligationsвыполнять обязательства

payeen получатель платежа

to initiate an instruction(зд.) дать указание

payern плательщик

to honour the checkоплатить чек

payment orderплатежное поручение

conveyv передавать

correspondent accountкорреспондентский счет

systemicadj системный

Ex. 19. Read the article below carefully to find specific information about paper-based payment systems, electronic funds transfer systems, and recent tendencies in the development of payment systems.


Paper-based systems are slow and costly to operate, involving physical movement of paper which must be sorted and cleared. They are prone to error, delays or disruptions because of returned cheques, missing documents or errors in data capture.

In recent years some countries have speeded up the documentation flows due to the rapid innovation of telecommunications and bank computer technology which has revolutionized payment systems. It is particularly true of debit or credit card-based transactions, in which bank customers may give instructions to effect funds transfers electronically through automated teller machines (ATMs), terminals or at retail outlets which operate electronic funds transfer at point of sale (EFTPOS). EFT systems have the advantage of speed, accuracy, convenience and greater efficiency relative to paper-based systems, but are much more costly to install and technologically complex to maintain.

Most developed countries now maintain a mixture of paper-based and EFT systems.

Modern payment systems generally cover the following key components:

a. cheque clearing system;

b. automated clearing houses for bank EFT payments;

c. credit/debit card systems including ATMs and EFTPOS;

d. giro payment system;

e. interbank funds transfer system (such as Fedwire); and

f. securities market clearing/settlement system.

Modern banking technology enables payment systems to handle larger volumes of information faster, with greater accuracy, thus reducing the float and the time lag between a transaction and its settlement. As banking systems and financial markets become more inter-linked, payment systems have become increasingly interconnected through harmonized document and telecommunication standards. The greater the degree of harmonization of standards, the more efficient the information flows.

Banks that engage in foreign trade and foreign exchange transactions find it useful to become part of the international electronic message switching network operated by SWIFT (the Society for Worldwide Interbank Financial Telecommunications).

Since payment systems also develop hand in hand with the volume of market transactions, modern payment systems are increasingly integrated with financial market settlement systems, where market transactions are automatically matched with payment instructions and settled on time.

Words you may need:

paper-based systemсистема, основанная на обработке документов в бумажном виде

to be prone to errorприводить к ошибкам, не исключать ошибок

delayn задержка

disruptionn срыв, нарушение

data capture(зд.) считывание данных

documentation flowдокументопоток

to effect funds transferосуществлять перевод средств

terminalтерминал retail outletторговая точка

electronic funds transfer at point of sale (EFTPOS)система электронных платежей в пункте продажи

giro payment systemсистема жироплатежей (почтовая)

Fedwire«Федуаер» – система электронной связи, принадлежащая Федеральной

резервной системе США

floatn срок между предъявлением чека в банк и его оплатой

time lagвременный лаг, отставание, запаздывание






Taxes are a 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 the 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 subject 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 Act.1

The United Kingdom operates a "schedular" system,2 whereby taxable income from different sources is calculated and taxed under the rules of a particular "schedule".

Tax assessments are normally based on returns issued by the Board of Inland Revenue (referred to simply as "Inland Revenue") for completion by the, taxpayer. While companies may receive tax returns, 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-assessment for tax on income and capital gains, but it is being introduced at the moment.

Under Russian law, all Russian 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 Russia are also taxed under this law.

Russian taxes provide revenue for three tiers of the budget: federal, regional and local. The major taxes paid to the budget are: Profit tax; Value-added tax (VAT); Securities tax; Withholding tax.

The Russian government tries to create a 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 for Russian 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 a 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. Many countries seek to mitigate the potentially harmful effects of double taxation by entering with other countries into double tax treaties, or arrangements preventing the same income being 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.



Foreigner: I hear that many Russians complain that taxes are too high in Russia, personal income tax, for example.

Russian: I can't agree with you here. The existing 12% income tax on personal income under 20 thousand roubles a year is not too heavy.

F.: There are many rich people in Russia now. How are higher incomes taxed?

R.: Progressive income tax is applicable in such cases. The larger the income, the bigger proportion of it is paid as tax.3 The upper limit of the tax rate is 35% at the moment.

F.: Oh, I must say that in many countries personal income taxes are also rather high. Can the same be said about taxes levied on businesses?

R.: The tax rate depends, first of all, on the form of business, on what each particular business is involved in. Juridical persons involved in entrepreneurial activities pay 13% to the federal budget and up to 25% to the regional budget.

F.: Do businesses involved in intermediary activities, including stock exchange activities, banking and insurance pay similar taxes?

R.: No, such businesses pay taxes on profit at a rate of 43%.

F.: Well, your profit tax is also comparable to other countries' taxes, isn't it?

R.: Yes, but the tax burden on businesses is too high, because along with the profit tax, enterprises pay VAT, excise tax, property tax and other local taxes. They also pay charges to the Pension Fund, Employment Fund, and Social Insurance and Medical Insurance Funds.

F.: VAT and excise are indirect taxes which are levied on transactions and are included into the selling price. They are paid by consumers and not by producers.

R.: Yes, you are absolutely right, but higher prices often cause sales problems.

F.: As to the VAT, do you use a flat rate for all goods?

R.: No, a reduced rate of 10% is applicable to foodstuffs and goods for children.

F.: In this connection, are there many tax allowances in Russia now?

R.: Quite a lot, but in the situation of growing tax evasion the government plans to do away with many tax breaks.

F.: Besides, as far as I know, there is a good deal of anxiety because the existing privileges for small businesses are under a big question mark.4

R.: Right. The majority of tax allowances have already been eliminated. Now small businesses have two alternatives. They either pay an imputed tax on income or pay taxes in the established order under which they have some tax deferments.

F.: These privileges deprive the state budget of some amount of revenue, don't they?

R.: Yes, but they are insignificant compared with the enormous sums that the industrial giants owe in taxes.

F.: The government must provide a clear-cut and stable legislative base for small businesses, I think.

R.: Not only for small businesses. All people suffer from hasty, ill-considered decisions which adversely affect millions of people.

F.: Is there any discrimination against foreign companies in Russia?

R.: No, Russian business legislation provides that a company should pay tax at the same rate whether it is foreign or Russian.

F.: And what about foreign companies that earn income from renting equipment or making loans to Russian companies?

R.: Lower rates are applicable in such cases. Taxes are a powerful instrument. They must be used to support not to stifle business.

F.: Foreign experience can be of help here.

R.: No doubt. The Taxation Ministry of Russia is cooperating closely with its Western counterparts to borrow Western experience.


1 the body of tax legislation being increased by each year's FinanceAct – причем налоговое законодательство расширяется за счет новых налогов, вводимых ежегодно при принятии финансового акта (самостоятельный причастный оборот – см. Note 3 в Unit 1)

2 The United Kingdom operates a "scheduler" system ... –В Великобритании существует система «шедул» ... (т.е. частей, на которые поделены доходы в зависимости от их источника)

3 The larger the income, the bigger proportion of it is paid as tax. –Чем выше доход, тем большая доля его выплачивается в качестве налога.

Конструкция со сравнительной степенью прилагательных используется для того, чтобы сравнить действия, происходящие одновременно.

4 are under a big question mark –находятся под большим вопросом


A. taxation n налогообложение, взимание налогов

compulsory adj обязательный, принудительный

tax on income подоходный налог

tax on wages налог на заработную плату

tax on salary налог на жалование служащих

tax on profitsналог на прибыль

tax on dividendsналог на дивиденды

tax on rentналог на рентные платежи

tax on interestналог на процентный доход

tax on capitalналог на капитал

direct taxes прямые налоги

indirect taxesкосвенные налоги

interest paymentsпроцентные платежи

municipal services муниципальные услуги

to give effect (to)осуществлять, приводить в исполнение, проводить в жизнь

welfare of the communityблагосостояние общества

inequality of incomesнеравенство доходов

forms of taxesвиды налогов

treatv обращаться, обходиться

levy v облагать налогом

corporate income taxналог на корпоративный доход

impose v облагать (пошлиной, налогами ), налагать

double tax burdenбремя двойного налогообложения

after-tax incomeдоход после удержания (за вычетом) налога

stock-holder n акционер, держатель акций

personal incomeличный доход

coden кодекс

tax law налоговое законодательство

body of tax legislation содержание налогового законодательства

Finance Actфинансовый акт

operatev (зд.) использовать, пользоваться

tax assessments установление налоговых ставок; определение размера облагаемого налогом дохода

return n налоговая декларация

to issue a returnвыдать налоговую декларацию

Board of Inland Revenue ("Inland Revenue")Налоговая служба Великобритании

to complete a returnзаполнить налоговую декларацию

submit v представлять

annual accountsгодовой отчет; (зд.) финансовая отчетность

computation n расчет, вычисление

taxable profitналогооблагаемая прибыль

system of self-assessmentсистема, при которой размер облагаемого налогом дохода определяется самим налогоплательщиком

capital gainsдоход от прироста капитала

foreign investmentиностранные капиталовложения

taxable permanent establishmentпостоянно работающее предприятие, облагаемое налогом

tier n уровень, ярус

value-added tax(VAT) налог на добавленную стоимость

securities taxналог на ценные бумаги

withholding tax налог с суммы дивидентов

audit v подвергать(ся) аудиторской проверке

tax authorities налоговые органы

to lodge an appeal подавать апелляционную жалобу

resident adj проживающий, постоянно находящийся в стране

domicile v поселиться на постоянное место жительства

seek (sought) v искать, стремиться

mitigate v смягчать, уменьшать

double taxationдвойное налогообложение

double tax treaty договор об избежании двойного налогообложения

arrangements n (зд.) меры, мероприятия

prevent v препятствовать, мешать, предупреждать

evasion of tax obligationsуклонение от налоговых обязательств

avoidance n уклонение

tax liability обязательства по уплате налогов

В. progressive income taxпрогрессивный подоходный налог

applicable adj применимый, пригодный, подходящий

comparable adj сравнимый

excise tax акциз, акцизный налог

chargen сбор, отчисление

Pension FundПенсионный фонд

Employment FundФонд занятости

Social Insurance FundФонд социального страхования

Medical Insurance FundФонд медицинского страхования

selling priceпродажная цена

sales problemпроблема сбыта

flat rateединообразная ставка

reduced rate льготная ставка

tax allowance налоговая льгота

tax break налоговая льгота

anxiety n беспокойство, обеспокоенность

imputed taxвмененный налог

tax deferment отсрочка налога

deprive v лишать

giant n гигант

owe v быть должным

clear-cut and stable legislative baseчеткая и стабильная законодательная база

hasty , ill-considered decisionsскороспелые, плохо продуманные решения

adversely adv отрицательно, неблагоприятно

affect v сказываться

to earn incomeполучать доход

to rent equipmentсдавать оборудование в аренду

stifle v душить


Ex. 1. Answer these questions:


A. 1. What are taxes?

2. What are the purposes of direct and indirect taxation?

3. Are businesses taxed equally?

4. How is taxation levied in the UK?

5. What taxes are paid to the federal budget?

6. What bodies collect taxes?

7. Do taxpayers have the right to appeal against additional tax liability?

8. What is the difference between tax evasion and tax avoidance?

9. In what situations can incomes be taxed twice?

B. 1. What is the attitude towards taxes in Russia?

2. How are personal incomes taxed in Russia?

3. How are businesses taxed in Russia?

4. How do taxes on businesses in Russia compare with similar taxes in other countries?

5. Are there any tax breaks in Russia? What privileges exist for small businesses?

6. What's the attitude of government officials towards tax exemption and tax deferment?

7. Is tax collection satisfactory in Russia at the moment? What are the reasons for the poor collection of


8. Is there any discrimination against foreign companies?

9. Do Russian tax authorities draw on Western experience?

Ex. 2. Give derivatives of:


tax n subject n investment n evasion n

provision n treat v audit n avoidance n

influence n assess v appeal n arrangement n

Ex. 3. Find English equivalents for the following Russian phrases from the text:


А. подоходный налог; налог на заработную плату; налог на жалованье служащих; налог на прибыль; налог на дивиденды; налог на рентные платежи; налог на процентный доход; налог на капитал; прямые налоги; косвенные налоги; покрывать издержки; процентные платежи по внешнему долгу; благосостояние общества; подлежать обложению налогом; относиться по-разному; доход после налогообложения; налоговая декларация; налог на добавленную стоимость; собирать налоги; проводить аудиторскую проверку; подавать апелляционную жалобу; незаконное уклонение от налоговых обязательств; задолженность по налоговым платежам;

В. применяется прогрессивный подоходный налог; верхний предел налоговой ставки; юридические лица, занимающиеся предпринимательской деятельностью; отчисления в Пенсионный фонд; эти налоги оплачиваются потребителями; единообразная ставка налога; облагать налогом по льготным ставкам; налоговые льготы; сбор налогов находится на низком уровне; стабильная законодательная база.

Ex. 4. Say in a few words what the main text is about. Use the opening phrases from Ex. 4 (Unit 1).

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