Meaning and sources of public/government revenue

Government revenue in one of the major component of public finance. It refers to the income or receipt of the government. Government collects revenue from various sources because it has to spend on various sectors of the economy to stimulate the economic development.

Generally tax revenue & non-tax revenue are considered as important sources of government revenue. But in a broader sense, government also receive revenue from foreign aid.

1)Tax revenue: 
Tax is a most important sources of government revenue. It is a compulsory payment to the government. The share of tax revenue in Nepal is 86.5% in total revenue in a fiscal year 2010/11. The tax revenue include the following sources,

i)Custom: 
Export tax, import tax and exercise duty are the major components of custom. It is major sources of government revenue in Nepal.

ii)Tax on consumption & production of goods & services:
 the tax imposed on consumption & production of goods and services includes the income collected from sales tax, value added tax, entertainment tax, hotel tax, road tax etc.

iii) Land revenue and registration tax: 
 Land revenue and house registration charges are the also the sources of government revenue. These are kind of direct tax.

iv) Tax on property, profit and income:
 it includes the tax from public enterprises, private corporate, boarding tax, individual income tax, profit tax, property tax etc.

2) Non-tax revenue:
 The share of non-tax revenue in Nepal is 13.5 percent in total revenue in the fiscal year 2010/11. It includes the following sources of government revenue,

i)Charges, fees, fines and forfeiture: 
Forms and registration charges, vehicles license, administration, fines and forfeitures are includes under this heading.

ii)Receipt from the sales of commodities and subsidies:
 It includes the income from drinking water, irrigation, electricity, postal service, transport, communication etc.

iii) Dividend:
 It includes the dividend of government earned from financial institution, trading concerns, industrial undertaking, service sector etc.

iv) Royalty and sales of Assets:
 It includes the royalty from mining, as well as other sources. It also includes the income from the sales of government land, building and etc.

e) Miscellaneous items: 
The income receipt from miscellaneous items such as escheats (government claim on the property of dead person having no any legal heir) is included under this heading.

3) Foreign Grants:
Foreign grants is also an important sources of government revenue of Nepal. The amount received by the government from neighbor nation and international institution, world bank etc, in the form of bilateral and multilateral aids are called foreign grants. Grants have not to be repaid by government.