About this sample
About this sample
Words: 976 |
5 min read
Published: Jan 29, 2019
Words: 976|Pages: 2|5 min read
Almost all countries get income from public revenue and public borrowing. Public revenue includes money that the government is not obliged to return from whom it was obtained. Public borrowing, on the contrary, carries with it the obligation on the part of the government to pay money back to the persons from whom it has been obtained. In this chapter, public sector revenue sources, public sector borrowings, intergovernmental transfers and revenue administration will be discussed.
The Financial management system (FMS) distinguishes between two main types of government revenue: own source revenue and transfers from other government sub-sectors. Own source revenue is defined as revenue raised by a government from its own imposition of a tax, a license, a fee or any other charge. Personal income tax, consumption taxes and contributions to social insurance plans are all part of that group. On the other hand, a transfer from another government sub-sector is an amount of money received directly from another party without a direct impost by the receiving party. Meanwhile, transfer payments fall into two categories-general purpose, where no restriction is placed on their use, and specific purpose, where certain conditions must be fulfilled in order to qualify for the transfer which govern the use of the transfer. Equalization payments are classified in the general transfer category, while provincial government transfers to assist municipalities in the operation and upgrade of the local road and bridge systems are classified in the specific transfer category (FMS. 2009)
This classification is divided into different categories: natural resource royalties, remitted trading profits, interest income and other investment income.
Property and Related Taxes
Transfers are broken down by level of government from which the transfers originate. Transfers from the federal government are as follows:
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