Few Ways Government Generates Income In Nigeria

Few Ways Government Generates Income In Nigeria

Generating income is a very important and essential part of the government’s function in any country. Income helps cover their costs, including funding programs and services like education and health care. In order to generate income effectively, the government uses several patterns and methods to make sure that it has enough money coming in to supplement its operations. Here are a few ways that the government generates income in our country.

1) Importing Duties and Charges

The collection of tax paid on imported goods is the most important function of the customs duty. There are various kinds of custom duties, but they all work to regulate trade, protect domestic businesses, and raise revenue for governments. The import duties and export taxes is one of the most important ways that governments generate income. The level of intensity of import tax varies from country to country, some countries have very high rates of customs duty while others impose a low ones.

2) The Inland Revenue

The government is a huge consumer of goods and services, but it also taxes its citizens for using these products and services. That’s where Inland Revenue comes in: it generates income for New Zealand’s government by issuing tax bills on behalf of New Zealand’s taxation department. And that includes making sure we pay our taxes! To learn more about how Inland Revenue operates

3) Excise Duty

Excise duty is a type of indirect tax on goods produced and sold inside a country. Excise duties are often used as an environmental measure. Such as charging more money for cigarettes to discourage people from smoking, or a public health measure. Like taxing sugary drinks to discourage people from drinking too much soda. You will usually see excise duty listed on items with higher price tags or high profit margins—like televisions or cars. On average, excise duty makes up 4% of federal government revenues, according to The Tax Foundation. In 2017, total revenue from excise taxes was $26 billion (USD).

4) Value Added Tax

Most countries have a value added tax. This is added to any product when it changes hands from a manufacturer to a retailer then customer. To make matters even more complicated, each country calculates their VAT differently. While most of Europe taxes only companies (not individuals), Australia has both kinds of VATs! And that’s just two examples out of dozens across the globe.

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