Q.What are the main sources of public revenue available to a government?

Government revenue comes from two broad channels distinguished by whether the payment is compulsory or in return for a specific service. …

Public revenue is classified into two broad categories:

1. Tax revenue — compulsory payments to the government with no direct quid pro quo (the payer does not receive a specific service in exact return). This is further split into:

• Direct taxes, levied on income or wealth and paid directly by the assessee (e.g. income tax, corporate tax) — the burden cannot easily be passed on to someone else.
• Indirect taxes, levied on the production, sale or consumption of goods and services (e.g. Goods and Services Tax, customs duty) — the burden can be shifted forward to the final consumer through prices.

2. Non-tax revenue — income the government earns other than through taxation, including:

• Fees charged for specific administrative or regulatory services (e.g. registration fees).
• Fines and penalties for violation of laws.
• Profits and dividends received from public sector undertakings.
• Interest received on loans advanced by the government. …

Students sometimes classify borrowings (loans raised by the government) as a form of revenue — borrowings are a capital receipt that creates a future liability, not revenue, …