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Governancce
Governancce
Governancce
D (2005), a professor of government and history, gets a bit more specific with his
definition. He says that government is 'responsible primarily for making public policy for an
entire society.' He also mentions that government is 'the steering mechanism for a given society.'
It forms the policies that keep a particular society heading in the right direction.
Black's Law Dictionary (2010) mentions that institutions of the government 'regulate the
relationships among members of a society and between the society and outsiders' and that they
'have the authority to make decisions for the society' to meet goals and maintain order.
In other words Government, whether we refer to the system or institutions in operation, the
group of people in charge, or the process in use, is the authority that sets rules for a society, helps
its members relate to one another and to others, and keeps it running smoothly, securely, and
peacefully.
In this assignment we are to discuss the main sources of Government revenue and indicate their
short coming.
The government as mentioned earlier is an institution that have the monopoly of authority to run
the affairs of the state or country. However, for the government to run its operations they require
to have adequate resources. According to Moonga (2005) some of the main sources of
government finances and their shortcomings are as follows:
1. Tax:
A tax is a compulsory levy imposed by a public authority against which tax payers cannot claim
anything. It is not imposed as a penalty for only legal offence. The essence of a tax, as
distinguished from other charges by the government, is the absence of a direct quid pro quo (that
is, exchange of favor) between the tax payer and the public authority, examples of taxes are;
mineral loyalties collected from the mines, value added tax (which is now sales tax), toll fees tax,
duty tax, customs among others.
(ii) It is the personal obligation of the individual to pay taxes under all circumstances,
On this the major shortcomings are, high unemployment levels in the country, Zambia to be
precise, high inflation rate, currency deprecation, the drop in mineral prices on the world market.
Rates:
Rates refer to local taxation, such as, taxation levied by (or for) local rather than central
government, for example; property tax, housing rent tax, ground rent tax among others.
Normally rates are proportional to the estimated rentable value of business and domestic
properties. Rates are often criticized as being unrelated to income. Also these taxes are collected
by the local authorities which make them the bigger beneficiaries of these revenues, in their
designated local areas, the government in general or the central government have no much
control towards these revenues.
Fees:
Fee is a payment to defray the cost of each recurring service undertaken by the government,
primarily in the public interest, for example the Cost Recovery User Fees Such charges of fees
can be placed on all forms of economic activities such as restaurant, motels, stores, and places of
entertainment. Some of these sources are just to maintain control since they are not really
lucrative but are just meant to maintain standard services.
License fee:
A license fee is paid in those instances in which the government authority is invoked simply to
confer a permission or a privilege, such as license to register a company, driving licenses, title
deeds among others. License fees also is another limited source of finances for the government,
in that the institutions that handle these processes also need to buy materials and finances their
operations as well at the end of the day the government does not get huge sums of money from
this source.
Borrowings:
Borrowings from the public is another source of government revenue. It includes loans from the
public in the form of deposits, bonds, among others. And also from the foreign agencies and
organizations. On this one the many challenge come into play when the loans fall due, it
becomes very cumbersome towards repayments of the loans, it is one of the areas which make
countries like Zambia to become economical slaves to the loan lenders in other words it becomes
a horse and riders relationship between the lenders and the one borrowing.
Conclusion
In conclusion finances are important for any organization in order to be able to function and the
government being the institution of the state is no exception.
Reference