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a means of generating state budgetary income.
Under capitalism, the turnover tax is the major type of indirect taxation and takes the form of price increases on commodities sold. In Great Britain, France, and the Federal Republic of Germany, value added taxes are imposed; in the United States, sales taxes are levied.
In the USSR and the other socialist countries, the turnover tax represents the portion of accrued cash, or net income, that has been acquired by socialist enterprises and production associations for direct conversion into state revenue. Through the turnover tax, the state mobilizes significant monetary resources for use in expanding socialist reproduction and satisfying other national requirements. The turnover tax is also used as an important economic tool to regulate the rate of profitability and thus to strengthen economic self-sufficiency. It is also a basic source for balancing republic and local budgets. By its economic content, the turnover tax is in fact not a tax—it neither adds to the price of a commodity nor subtracts from the wages of production and office workers or from any other income payable to the working people. It possesses only such external characteristics of a tax payment as compulsory remittance, fixed amount, and predetermined schedule.
The division of accrued cash into profit and turnover tax and the principles for transferring all such funds to the budget were established in the tax reform of 1930. The turnover tax is paid by all profit-and-loss state and cooperative enterprises except kolkhozes, and also by enterprises operated by public organizations. The turnover tax is collected mainly in economic sectors related to light industry and the food industry. These sectors bear a heavier share because not only the value of the surplus product they themselves have created but also a portion of the surplus value produced in other sectors, such as heavy industry, construction, and agriculture, must be accounted for in their turnover taxes.
No turnover tax is payable on a great many consumer goods. Among these are bread and baked goods; meat, meat products, and sausage; milk, milk products, butter, and cheese; canned goods; fruit and vegetables; drugs; and books. In heavy industry, the turnover tax is levied on petroleum and gas, electric power, and certain types of machine building.
The turnover tax can be levied in several ways: as the difference between the enterprise’s retail and wholesale prices, minus rebates; by a fixed scale, set in rubles per unit of output measured by volume, as per ton of petroleum products, cereals, or cured tobacco, or per thousand cubic meters of natural and by-product gas; or as a percentage of total turnover, as with goods for which wholesale prices have not been set by the enterprise. The revenue gained from turnover taxes that are based on price differentials is the most important; the share of overall turnover taxes obtained from this source increased from 74 percent in 1964 to 80 percent in 1972. At the same time, turnover taxes levied according to fixed scales expressed in percentages of total earnings declined from 12 percent to 5.8 percent of the total.
The turnover tax plays an important role in providing the state budget with stable, regularly receivable payments. In absolute terms, the amount of turnover tax revenue received by the state budget is steadily increasing: in 1960, the amount was 31.3 billion rubles; in 1965, 38.7 billion rubles; and in 1972, 55.6 billion rubles. At the same time, the proportion made up by turnover taxes of both total cash accruals by enterprises and state budgetary income has dropped. Turnover taxes represented 48.0 percent of enterprise cash accruals in 1960, 46.5 percent in 1965, and 37.8 percent in 1972. Turnover taxes provided 40.7 percent of state budgetary income in 1960, 37.8 percent in 1965, and 31.7 percent in 1972. This decrease in the role of the turnover tax is brought about by the increased role of profit as the main form of cash accrual and the primary source of state budgetary income.
In order to stimulate the production of consumer goods, to expand their diversity, and improve their quality, manufacturing enterprises may be extended certain privileges, among which may be full exemption from the payment of turnover taxes on merchandise sold.
V. V. DEMENTSEV