Government Revenue:

Government exists in every society to perform a number of functions which are critical to the general well-being of the people. Such functions include:

i. Provision of legal framework and a social environment conducive to the effective operation of the price system.

ii. Creation and maintenance of social and economic infrastructure e.g. roads, bridges, electricity, pipe-borne water, sanitation, etc. They are called public goods or social overheads.

iii. Redistribution of income e.g through direct transter payments or welfare programmes for the vulnerable members of the society.

iv. Re-allocation of resources, and

v. Promotion of macroeconomic objectives

To be able to perform these and other related functions, however, government requires some funds. Government revenue is the income which accrues to the government to enable it perform its traditional functions.

Sources of government revenue are conventionally classified into two:- tax revenue and non-tax revenue.