August 2000

15 August 2000

Dear Mr KOEZUKA

We have the pleasure to invite you to participate in the International Conference "10^th Anniversary of Antimonopoly Bodies.".

This high-level International Conference will take place in Moscow, 18-19 October 2000. It will host participants from foreign and international organizations, governmental, academic and business circles for discussion of crucial problems of competition policy and competition law.

The working languages of the Conference are Russian and English.

For further details please contact Ms Johnston (tel.: 456 899 01)

Joe Brandton

Vice-Minister

аспирантура (канд. экз.)

Экзаменационный билет (на 2 листах) по дисциплине

английский язык

(специальность: социальная философия)

Task I. Translate from English into Russian in writing using a dictionary. Your time is 45 minutes

But there is the important difference that attempts are already made to adjust certain official statistics—most notably the national accounts—to include an estimated amount for the black economy. Productive activity in the rest of the shadow economy is almost entirely excluded from gdp by convention: official statistics are confined to measuring transactions where money changes hands. The amounts included in gdp for the contribution of the black economy are not large— they have generally been between 1 and 3 per cent of total gdp. And our own estimates do not suggest that it is much larger—perhaps in total some 3 to 5 per cent of gdp.

The black economy is, however, highly concentrated in particular areas. Certain types of taxpayer are in a better position than others to evade income tax. In particular, self-employed people have control over the amount of income they declare for tax in a way that most employee taxpayers, who pay tax through paye, do not. Through econometric analysis of employee and self-employed households' expenditure patterns, we found evidence of substantial under-declaration of income by householders where the head was self-employed. We estimated that on average self-employed households were failing to declare some 10 to 20 per cent of income for tax, making tax evasion by the self-employed much the largest part of the black economy. Second job earnings may also escape the paye net—but survey evidence suggests that incomes earned in second jobs may well be less than 1 per cent of incomes earned in main jobs.

The kinds of business most involved in the black economy are likely to be smaller businesses selling labour-intensive services to private households and individuals—building, decorating, cab driving, for example. Larger businesses are likely to experience control and management problems if they try to conduct business "off the books" on a large scale; and the structure of the tax system— especially of vat—means that it is a high value-added business where the greatest competitive pressures to trade "off the books" may arise.

Task II. Translate the letter from English into Russian without a dictionary. Your time is 5-7 minutes

TO: Ms Klery STAVRAKAKIS

Director

Organization of Small and Medium Sized Enterprises

5 February 2000

Dear Ms Stavrakakis

Herewith we are informing you that Mr Bogachev, Deputy Minister, who is a participant to the AZ1A FORUM 2000 in Thesallomki on February 7-8, will be in Athens on February 9 in the afternoon.

Taking the chance of being in Athens he would greatly appreciate if you could meet so as to discuss issues of mutual interest.

Please contact Mr Filimonov so as to arrange the meeting.

I thank you in advance for your kind cooperation.

Sincerely yours

Vladimir Egorov

Head, Department for International Relations

аспирантура (канд. экз.)

Экзаменационный билет (на 2 листах) по дисциплине

английский язык

(специальность: социальная философия)

Task I. Translate from English into Russian in writing using a dictionary. Your time is 45 minutes

Given this uneven distribution of the black economy across the economy, who benefits from it? On the face of it, it would seem that the people who work in the black economy, and do not pay the income tax or vat that they are supposed to pay, are the gainers, and that the "honest taxpayers" are the losers. But in fact the answer is more complex than this. Each transaction in the black economy involves a buyer and a seller; the gains to be made for evading tax may accrue to either—or may be split between them. How the gains from evasion are divided between buyers and sellers of black economy goods and services depends on the prices at which they are sold. If customers get a discount off black economy work, or if black economy traders try to undercut the prices of formal economy traders to gain business, then some of the gains from tax evasion will flow to the customer.

Indeed, in sectors where black economy business forms a high proportion of the total, customers may receive all the gains from evasion, and the seller none. In parts of the building industry, for example, evading tax may be the price for business survival; competition from other black economy businesses may hand all the gains to customers.

Where the black economy is small, the gains from evasion are likely to be reaped by the businesses involved. This does not necessarily mean that they flow to the rich; the earnings of many self-employed people are surprisingly low. But we believe by far the largest part of the black economy to be concentrated in a relatively small number of areas—in building and decorating in particular. Here competitive pressures may transfer most of the gains to the customers, through a lower level of prices for these services. Typically the customers will be owner occupiers, and relatively well off. The black economy may well reinforce inequality.

How does the pattern of production in the wider shadow economy affect the relative living standards of different sections of the population? There are few households which do not perform some unpaid productive activity, but those households that can afford labour-saving domestic equipment may use their domestic labour time more productively than those who cannot.

The need for expensive equipment and materials may also prevent poorer households participating effectively in areas of shadow economy production such as diy. The unemployed, whilst having plenty of free time, can rarely buy the materials and equipment necessary for home maintenance and home improvements.

Task II. Translate the letter from English into Russian without a dictionary. Your time is 5-7 minutes