Question: What are the sources of public revenue in Uganda.
There are two major categories of public revenue i.e. Tax revenue and Non tax revenue.
Tax revenue is generated from taxes on income, profits and capital gains, taxes on goods and services which include value added tax (VAT) and excise duty and taxes on permission to use goods or to perform certain activities for example operating a casino or lottery organizations.
Non-Tax Revenue is the revenue obtained by the government from sources other than tax.
The sources of non-tax revenue are: (a) Fees (b) Fines or Penalties (c) Surplus from Public Enterprises (d) Special assessment of betterment levy. It is a kind of special charge levied on certain members of the community who are beneficiaries of certain government activities or public projects. For example, due to a public park in a locality or due to the construction of a road, people in that locality may experience an appreciation in the value of their property or land. Thus, due to public expenditure, some people may experience 'unearned increments' in their asset holding. Betterment levy is like a tax because it is a compulsory payment, but unlike a tax, in case of betterment levy there is some element of quid pro quo.
(e) Grants and Gifts (f) Deficit Financing. Deficit means an excess of public expenditure over public revenue. This excess may be met by borrowings from the market, borrowings from abroad, by the central bank creating currency.
In case of borrowing from abroad, there cannot be compulsion for the lenders, but in case of internal borrowings there may be compulsion.
The government may force various individuals, firms and institutions to lend to it at a much lower rate than the market would have offered.