Finance Summary – Nation’s economy, Budget,Taxes

The Nation’s economy

The economy of the country is like a machine provides us with things we need, it means goods and services. The economy creates the wealth of the country. A nation’s economy can be divided into three sectors of activity. They are primary, manufacturing and service sectors. Economy machine controlling by government, which uses fiscal and monetary policies.
The economy of Great Britain is based on private sector. Government policies are admired at raising productivity, increasing employment opportunity for all, providing educational opportunity for all, abolishing poverty… It helps keep inflation low, maintain sound public finances and create the right climate for markets to work better.
In Russia economy growth continued. The last year was one of the best for us. GDP grew at a reasonable pace, then we harvested a record crop. It was due to favorable weather conditions and to pay back of investment and reforms in agriculture. Industrial production went up in some branches, though the real sector still needs more investment. A lot of laws were passed last year to attract foreign investment, tax system was simplified. The living standards improved: pensions were increased, salaries of state employees raised too, demand for consumer goods increased.
So, considerable progress was made in our country last year.

The budget

The budget is a forecast of revenue and expenditure for the coming year. It is the government’s main economic statement.
In UK the budget is prepared and issued in March. It presented by Chancellor of the Exchequer in a major speech to Parliament. He reviews economic performance, describes the government’s economic objectives and economic policies it intends to follow. Since 1993 in Great Britain are issued „so-called“ Unified Budget, which contains government’s taxation plans and spending proposals to Parliament for the next three financial years. This budget announced to the House of Commons and published in the Financial Statement and Budget Report.
In Russia draft budget is prepared by the government and submitted to the State Duma for consideration. When Duma approves the draft it goes to the President who sight it into law.
Fiscal and monetary policies are the main instruments, which forms budget and revenue. There are income tax, taxes on expenditure (Value Added Tax, customs and excise duties), National Insurance contribution the main sources of revenue.

Taxes

Taxes are the compulsory financial contribution by a person or body of persons towards the expenditure of a public authority.
Government taxes income, wealth or consumption to finance its expenditure on defense, social services, municipal services and others.
The main forms of taxes are direct and indirect taxes. Direct taxes are the major sources to generate tax revenue. Direct taxes are divided into individual income tax, which can be regressive and progressive, and corporation income tax. There are VAT, excise and customs duties are the forms of indirect taxes.
The major principles of a tax system that it should be equitable and reasonable shouldn’t be costly and shouldn’t contain a lot of allowances and exemptions. And then the incentive to avoid and to evade taxes would be less.
In Russia The Federal Tax Service is a new organization, but its role is very important, because the private sector is developing fast. The Russia Government is trying to lower the tax burden and to simplify the tax system. There are plans to reduce profit tax and VAT.

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Source by Michael Newman