National revenue and expenditure

Sources of government revenue

  • Taxes – these include Income Tax, Customs Duty and Value Added Tax.
  • Trade licenses.
  • Loans from World Bank and International Monetary Fund. These have to be repaid with interest.
  • Aid and grants from friendly countries. These are some form of gifts and do not need to be paid back.
  • Interest on government loans.
  • Rent paid by people occupying government houses and offices.
  • Court fines.
  • Dividends from shares bought by the government in profitable companies.
  • Rates paid by people who own property in urban areas.
  • Profits made by parastatal organisations.

Forms of government expenditure

The government uses the money it collects to:

  • Repay loans.
  • Construct roads, schools and hospitals.

  • Provide basic services like education, health and security.
  • Pay salaries.

Role of government in the society

  • The Legislative arm of the government makes laws through parliament.
  • Protecting the rights and freedoms of its citizens.
  • Collecting revenue.
  • Improving the standards of living of the citizens.
  • Providing basic services such as health and education.
  • Providing security for all its citizens.
  • Paying salaries for all government employees.
  • Planning the expenditure for the country.
  • Preparing and reading the Budget on Budget day, on how the money collected is to be spent.