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ECO 415 CH 8 Govt Policies
ECO 415 CH 8 Govt Policies
ECO 415 CH 8 Govt Policies
LOGO
Govt Revenue
SOURCES
Revenue
Borrowing
Issuing
Others
Non rev
Direct
Indirect
Govt Revenue
1) Direct Taxes
taxes that are collected from the people or organizations eg : indv income taxes, Companies income tax, Petroleum income tax, Stamp duties, real property gains tax
2) Indirect Taxes
imposed on rights, privileges, and activities. eg : Export duties, Import duties, Excise duties, Sales tax, Service tax 3)
Non Taxes
other than taxes eg : Licence and permits, Petroleum royalty, Interest and returns on investment, services fees and fines and penalty.
4) Non Rev
eg : refunds of expenditure, interdepartmental credit, refunds overpayment, erroneous payment, reimbursement & contribution from govt dept, statutory bodies @ govt owned enterprise
Proportional vs Progressive vs Regressive T important feature of tax systems is the percentage of the tax burden as it relates to Y or C. to describe the way the rate progresses from low to high, from high to low, or proportionally.
a) progressive tax tax imposed so that the effective tax rate as the amount to which the rate is applied b) regressive tax tax rate as the amount to which the rate is applied c) proportional tax effective tax rate is fixed as the amount to which the rate is applied
Govt Expenditures
EXPENDITURE
OPERATING For maintaining services, facilities & dept Social services Emoluments
Subsidies
Other expenditure
Asset acquisition
Dev Expenditure
1) Social services
a) b) c) d) a) b) c) d) e) a) b) c) d) Education Health Housing Social and community services public services Statistics Royal Customs and Excise Inland Revenue Departments Ministry of Foreign Affairs. Agriculture and rural development Trade and industry Transport Public utilities
2) General admin
3) Economic services
Fiscal Policy
A. Obj of FP
To maintain the stability of the economy Solve macroecon problems Reach efficient econ ie FE & high growth (steady rate & stable P)
B. Tools
Govt exp development and operating Tax rev
C. Types of FP
Expansionary FP @ Deficit budget Contractionary FP @ Surplus budget Balanced budget
Monetary Policy
Aimed at stabilizing the economy w/out inflation & deflation Implemented thru BNM by regulating Ms & IR Obj of policy
a) Maintain the stability of general P in econ b) Maintain the stability of IR & financial mkts c) Achieve steady rate of econ growth & national income d) Achieve FE & efficiency in the use of resources e) Maintain stability of forex mkt & favourable BOP
2) Qualitative tools
a) Selective credit control control types of loan given b) Moral suasion discourage heavy borrowing c) Special directives new instructions