Revenues
Revenue is defined as the total amount of earnings that accrues to an organization to assist in financing
its activities. Government revenue is all the money received other than from debt and liquidation of investments.
Government revenue comprises of licenses, charges, sale of government properties, tax collections,
and fines; among others. Therefore revenue is the entire amount of income a state is able to raise from
various source under its territory within a definite period.
State government is similar to the other tiers of government (local government and federal government)
having various sources. There are two types of revenue that state governments can raise:
internally generally generated revenue (IGR) and revenue allocation from the federation account (statutory allocation).
Internally generated revenue are the revenues gotten within the state's
territory and from various sources which include: taxes such as PAYE, road taxes, direct assessment,
fines, licensing, interest on investments, rent from government properties, and fees.
Whereas statutory allocation is from the Federation Account, according to revenue allocation formula.
Lets have a look at some other revenue heads that a state may generate.
Rates
Rates refers to levies collected by local government authorities from the services the council provides. The rates are collected on market stalls, motor parks, Supermarkets and shops. Some rates are also collected from bicycle and motor-cycle licenses, television, radi sets, etc.
Property or tenement rate is imposed on the owners of private and commercial houses . It is based on the value of the building and property.
Levies
This refers to levies imposed on the residents of local governments as a means of generating internal revenue.
These are compulsory levies imposed by the state government on individuals, institutions, corporate
bodies, expenditures, etc, for which no direct benefits are received. Taxes/Levies Collectible by
State Governments includes: Personal income tax:
Pay-As-You-Earn (PAYE); Withholding tax (individuals only); Capital gains tax; Stamp duties
(instruments executed by individuals); Pools betting, lotteries, gaming and casino taxes; Road taxes, etc. These constitute major sources of
internal revenue to state governments
Fines
These include money imposed on law offenders/breakers in the state. Fines are paid in courts and they form part of Government Revenue.
Fees
These are imposed on goods and services provided by the State government and they include tuition at state-owned colleges and universities, tolls and transportation charges, hospital charges, parks and recreation fees, solid waste charges, and other fees for the use of government services.
License
These include money State governments charge individual for obtaining various types of licenses such as vehicle licenses and other certificates. Licenses have to be obtained to operate hotels, pool- betting, Casinos, etc.
Earnings And Sales
These include the incomes or profits that state governments derive from their investments or business ventures such as State owned hotels, transport business, production outfits, etc. They also include incomes government derive from the sale of government property such as land, houses, vehicles, equipment, etc.
Rent on Government Property
Most State governments also derive significant amount of revenue from rent paid by people who hire government property such as houses, land, etc.
Interest and Dividends
State governments also get revenue from interests on capital that they lend out to individuals, institutions or Local Governments. They also receive dividends on state-owned shares and stocks.
Miscellaneous
State governments also get revenue from interests on capital that they lend out to individuals, institutions or Local Governments. They also receive dividends on state-owned shares and stocks.