Economics · Ch 10 — Budget
Revenue Budget: Revenue Receipts and Revenue Expenditure
Revenue Budget: Revenue Receipts and Revenue Expenditure
The government budget is divided into two parts — the Revenue Budget and the Capital Budget. This section covers the revenue side.
Revenue Receipts are receipts that (a) do not create any liability for the government, and (b) do not lead to any reduction in the government's assets. In plain terms, revenue receipts are money the government does not have to pay back and does not have to give up any asset to get. They fall into two broad categories:
| Category | Meaning | Examples |
|---|---|---|
| Tax revenue | Compulsory payments to the government, backed by law, with no direct quid-pro-quo (the taxpayer gets no specific service in direct return) | Income tax, corporation tax, GST, customs duty, excise duty |
| Non-tax revenue | Revenue from sources other than taxes | Fees (e.g. court fees, registration fees), fines and penalties, profits of public sector undertakings, dividends and interest receipts, grants received |
Tax revenue itself splits further into direct taxes (levied directly on the income/wealth of a person or firm, and cannot be shifted to someone else — e.g. income tax, corporation tax) and indirect taxes (levied on goods and services, and can be shifted to the final buyer — e.g. GST, customs duty). …
Government receipts that neither create a liability nor reduce an asset — e.g. tax collections, fees, fines, dividends from publ …
Government spending that neither creates an asset nor reduces a liability — e.g. salaries, pensions, interest …