Government (or Public) revenue may be defined as the total income that accrues to all levels of administration (local, state and federal) or government from various sources. Government or public revenue includes capital revenue (or receipts) and recurrent revenue.


Types of public revenue

  1. Capital revenue (or receipts): Capital receipts, also called irregular or extraordinary sources of revenue, are sources of revenue used for meeting expenditure on heavy capital projects, e.g. grants, loans, transfers from current revenue, etc.
  2. Recurrent revenue: Recurrent revenue is a regular source of revenue which is income received on a regular or yearly basis, e.g. taxation, fees and licences, fines and interests on loans, etc.


Sources of Government Revenue

  1. Taxes: Taxes include both direct and indirect taxes. Government generates income or revenue by taxing individuals and corporate bodies.
  2. Loans: Government can obtain loans, from both internal and external sources, e.g. the World Bank, etc.
  3. Grants and aids: Government can receive grants and aids as revenue from wealthy or developed countries.
  4. Licence: Government can generate revenue through licences, e.g. driving licence.
  5. Savings: Government can also generate revenue through savings, especially when a country has budget surplus.
  6. Rents and rates: Earnings from water, properties, housing, etc. owned by the government are sources of income to the government.
  7. Fees fines and royalties: Government can generate revenue through court fees, mining companies, postage charges etc.
  8. Earnings for government investments: Government can also earn income from government-owned business enterprises or from joint ventures.