Central Banking, Money and Taxation │ Important Vocabulary │ BBA Notes │ Business Communication │ 3rd Semester │ TU

Central Banking, Money and Taxation



Important Vocabulary


  • Income tax: The tax people pay on their wages and salaries
  • Direct tax: A tax on wages and salaries or on company profits
  • Progressive tax: A tax levied at a higher rate on higher income
  • Indirect tax: A tax paid on the property, sales transactions, imports, and so on
  • Value-added tax: A tax collected at each stage of production, excluding the already-taxed costs from the previous stages
  • Capital gain tax: Profits made by selling assets
  • Capital transfer tax: Gifts and inheritances over a certain value
  • Wealth tax: The annual tax imposed on people's fortune
  • Tax evasion: Making false declarations to the tax authorities
  • Tax avoidance: Reducing the amount of tax you pay to a legal

  • Depreciation: Reducing the value of a fixed asset, by charging it against profits
  • Disincentive: Something which discourages an action
  • Regressive: An adjective describing a tax that is proportionally higher for people with less money
  • Consumption: Spending money to buy things, rather than saving it
  • Self-employed: Working for yourself, being your own boss
  • National insurance: A tax levied on incomes that pay for sickness benefit, unemployment benefit, and old-age pensions
  • Perks: Non-financial benefits or advantages of a job
  • Tax shelter: A way to delay the payment of tax to a later time
  • Tax-deductible: An adjective describing expenditures that can be taken away from taxable income or profits
  • Tax haven: A country offering very low tax rates to foreign businesses




Matching up the Central Banking Functions With Given Expressions


  1. Printing money and destroying it: Controlling the number of banknotes in circulation

  2. Setting interest rates, ceiling, and floors: Establishing maximum and minimum lending rates, thereby controlling the credit system

  3. Commercial banking supervision: Ensuring that banks have a sufficient liquidity ratio to allow customers to withdraw their deposits when they want

  4. Exchange rate supervision: Intervening on foreign exchange markets, buying or selling large amounts of the national currency, to prevent major fluctuations

  5. Act as a lender of last resort: Lending money to a commercial bank in danger of going bankrupt

  6. Open market operations: Selling government bonds to commercial banks or buying them back, to alter the amount of credit the banks can offer (and thereby alter the money supply)


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Extracted From:

MacKenzie, I. (2002). English for Business Studies: A course for Business Studies and Economics students (Second). Cambridge University Press.



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