Lessons 34 · 1 lessons · E. Sariqov, B. Khaydarov. Foundations of Economics, Grade 8. “Huquq va Jamiyat” Publishing House, Tashkent, 2019
34
Basics of taxation
Textbook: pp. 140–143
GoalDistinguishes the principles of taxation, tax subject and object, kinds of tax rate (fixed and relative; proportional, progressive, regressive), and individuals and legal entities, and calculates simple taxes.
New words
tax object: the income, property or good on which tax is levied · soliq obyektitax rate: the amount of tax per unit of the tax object, in money or in percent · soliq stavkasiproportional rate: the same percentage whatever the size of the object · proporsional stavkaprogressive rate: the percentage rises as the object grows · progressiv stavka
Explanation
Two subjects take part in tax relations: the taxpayer and the collector, an authorised state body (tax service, customs). The tax object is what is taxed: income, property, land or goods. The tax rate is the amount set for each unit of the object: a fixed rate is in money (for example, a set sum per unit), a relative rate is given in percent. By how it depends on the growth of income, the rate is of three kinds. A proportional rate is always the same percentage. With a progressive rate the rate rises as income rises (someone who earns more pays a bigger share). With a regressive rate it falls as income rises. Taxpayers can be individuals (citizens, foreign citizens) and legal entities (enterprises, firms, institutions set up under the law). Tax law relies on the principles of compulsoriness, clarity, fairness, uniformity, openness and the taxpayer’s right. By the last one, unclear points in the law are resolved in favour of the taxpayer.
Worked examples
A conditional example (not real rates): a proportional rate of 10%. Person A’s income is 3 000 000 so‘m and person B’s is 6 000 000. A pays 300 000, B pays 600 000 so‘m. The percent is the same for both, while the sum differs with income.
A conditional progressive rate: 10% up to 5 000 000 so‘m, 20% on the part above it. If income is 8 000 000 so‘m: 5 000 000 · 10 : 100 = 500 000; the remaining 3 000 000 · 20 : 100 = 600 000; total tax 1 100 000 so‘m. (The current personal income tax is at a single rate, 12%.)
Class activity
“Subject or object?”: the teacher shows cards (tax service, house owner, plot of land, wages, an enterprise, a litre of petrol); pupils sort them into “tax subject” and “tax object”.
Practice
1
State the difference between the tax object and the tax rate.
The object is what is taxed (income, property, goods); the rate is the amount of tax set per unit of that object.
2
A conditional proportional rate of 12%. Income is 2 500 000 so‘m. How many so‘m is the tax?
300000
3
A conditional progressive rate: 10% up to 4 000 000 so‘m, 15% on the excess. Income is 6 000 000 so‘m. How many so‘m is the tax?
700000
4
Why is the principle of the taxpayer’s right important?
Because it ensures the taxpayer does not suffer from unclear rules: doubts are resolved in his favour.