Second Year Test 1

Question 1

Define the term taxation

Answer 1

Taxation is the way the government collects money to pay for public services

Question 2

Who is responsible for collecting tax

Answer 2

The office of the revenue commissioner is the state body responsible for collecting all tax’s in the Republic of Ireland

Question 3

What is progressive tax

Answer 3

Progressive tax is one where the tax rate increases as income increases. The more you earn the more taxation you pay

Question 4

Define the term regressive taxation

Answer 4

Regressive taxation are tax’s that affect low income earners by taking a high percentage of income

Question 5

What is direct tax

Answer 5

Direct tax is paid on income earned. Eg. PAYE is deducted from your wages

Question 6

Define the word dirt

Answer 6

Dirt is a tax on the internet you earn on your savings

Question 7

Define the term PAYE

Answer 7

PAYE is tax payed on the income that you have earned

Question 8

What is self assessed income

Answer 8

Those who are self employed or earn income pay this tax

Question 9

What is USC

Answer 9

USC is tax payed in addition to PAYE and everyone has to pay it

Question 10

Define the term VAT

Answer 10

VAT(value added tax) is a tax on goods and services. Eg.bread

Question 11

What are custom duties

Answer 11

Custom duties is tax on imported goods from outside the EU

Question 12

Define the term excise duties

Answer 12

Excise duties is a tax on certain goods. Eg. Petrol and diesel

Question 13

What is local property tax

Answer 13

Tax payed by owners of residential properties

Question 14

What is stamp duty

Answer 14

It is tax charged on some written documents. Eg. If you want to buy a house and have saved up you will have to save up extra money to pay this tax

Question 15

What is motor tax

Answer 15

Tax charged on motor vehicles. Eg. Cars

Question 16

Define the term vehicle registration tax

Answer 16

It is a once off tax payed for new cars

Question 17

What is deposit interest retention tax

Answer 17

It is tax earned on your savings

Question 18

Define the term capital gains tax

Answer 18

Capital gains tax is if you by a share of a company and sell it you will have to pay tax on that

Question 19

What is capital acquisition tax

Answer 19

It is a tax on money you inherit left to you be someone over a certain amount

Question 20

What is tax evasion

Answer 20

Tax evasion is illegal and usually happens when people declare some or all of their income

Question 21

Define the term tax avoidance

Answer 21

Tax avoidance is perfectly legal.eg. Revenue allows eligible taxpayers to claim certain tax credits

Question 22

What is government revenue

Answer 22

Government revenue refers to all money received by the government

Question 23

Define the term current revenue

Answer 23

Current revenue is money received by the government on a regular ongoing or day to day basis. Most of this revenue comes from taxation. Eg VAT

Question 24

Define the term capital revenue

Answer 24

Capital revenue is money received on an irregular or once off basis. This is mainly non-tax revenue. Eg. EU grante

Question 25

Give me 3 examples of government capital expenditure

Answer 25

Public transport eg. Building new roads,health eg. Building new hospitals and education eg. Building schools

Question 26

What is a budget deficit

Answer 26

A budget deficit occurs when planned expenditure is greater than expected revenue. This suggests that the government is living beyond its means and will have to increase revenue or borrow money

Question 27

Define the term national budget

Answer 27

A national budget is an annual plan for what the governments planned revenue and expenditure

Question 28

What is the need for a national budget

Answer 28

It outlines the general economic Changes the government proposes to make on tax’s and spending

Question 29

Give 3 examples of capital government revenue

Answer 29

EU Grants,Sale of semi state bodies and dividends from semi state bodies

Question 30

Explain the term EU grants

Answer 30

EU grants is money given to Ireland from the European Union for specific projects eg roads

Question 31

What is a sale of semi state bodies

Answer 31

It’s income from the sale or part sale of a semi state company

Question 32

Explain the term dividends from semi state bodies

Answer 32

This is the governments share of the profits made by a semi state body

Question 33

Explain two types of government current expenditure

Answer 33

1. Wages and salaries the government are responsible for them to teachers healthcare workers and many others
2. Social welfare is payment’s made weekly to people who are entitled to receive them. Eg. Child benefit

Question 34

Explain two types of government capital expenditure

Answer 34

1. Equipment: the government provides it for government buildings eg. Garda cars
2. Infrastructure: the government is responsible to provide the the basic facilities and services for a community eg. Roads and parks

Question 35

What is corporation tax

Answer 35

Tax an the a companies profits

Question 36

What is income tax

Answer 36

Income tax is tax on your wages and salaries

Question 37

What is PRSI

Answer 37

PRSI is tax you pay so that you are entitled to social welfare payments if you need them. Eg. Jobseeker benefit