# Tax revenue

Part of a series on :
Taxation :
An aspect of fiscal policy :
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Government revenue
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Tax revenue
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Medical savings account :
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Distribution of Tax
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Private tax collection :
Noncompliance
Legal tax avoidance
Base erosion and profit shifting (BEPS)
Double Irish
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CAIA
Dutch Sandwich
Tax credit
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Taxpayer groups
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Tax patent
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Tax resistance
Transfer mispricing
Unreported employment
Locations
Tax havens
Corporate havens
Offshore financial centres (OFCs)
Offshore magic circle
Conduit and sink OFCs
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Financial Secrecy Index
Major examples
Ireland as a tax haven
Ireland v. Commission
Leprechaun economics
Liechtenstein tax affair
Luxembourg Leaks
Offshore Leaks
Paradise Papers
Panama Papers
Swiss Leaks
United States as a tax haven
Panama as a tax haven :
Types
Direct
Indirect
Per unit
Ad valorem
Aviation
Airport improvement
Landing
Solidarity
Capital gains
Expatriation
Consumption
Departure
Hotel
Sales
Stamp
Television
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Eco-tariff
Landfill
Natural resources consumption
Severance
Steering
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Excise
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Fat
Meat
Sin
Sugary drink
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General
Georgist
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Gross receipts
Hypothecated
Income
Inheritance (estate)
Land value
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Pigouvian
Property
Resource rent
Single
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Turnover
Use
User charge/fee
Congestion
Fuel
Road/GNSS
Toll
Vehicle miles traveled
Corporate profit
Excess profits
Windfall
Negative (income)
Wealth :
International
Financial transaction tax
ATTAC
Currency transaction tax
European Union Common Consolidated Corporate Tax Base (CCCTB)
Global minimum corporate tax rate
Robin Hood tax
Tobin tax
Spahn tax
Tax equalization
Tax treaty
Exchange of Information
Permanent establishment
Transfer pricing
European Union FTT
Foreign revenue rule :
Trade
Custom
Duty
Tariff
Import
Export
Tariff war
Free trade
Free-trade zone
Trade agreement
ATA Carnet :
Research
Academic
Mihir A. Desai
Dhammika Dharmapala
James R. Hines Jr.
Ronen Palan
Joel Slemrod
Gabriel Zucman
Advocacy groups
Institute on Taxation and Economic Policy (ITEP)
Oxfam (UK)
Tax Foundation (US)
Tax Justice Network (TJN)
Tax Policy Center (US) :
Religious
Church tax
Eight per thousand
Teind
Tithe
Fiscus Judaicus
Leibzoll
Temple tax
Tolerance tax
Jizya
Kharaj
Khums
Nisab
Zakat :
By country
All Countries
List of countries by tax rates
Tax revenue to GDP ratio
Tax rates in Europe
Individual Countries
Albania
Algeria
Argentina
Armenia
Australia
Azerbaijan
Bangladesh
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Brazil
Bulgaria
BVI
Canada
China
Colombia
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Denmark
Finland
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Hong Kong
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India
Indonesia
Iran
Ireland
Israel
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Japan
Kazakhstan
Lithuania
Malta
Morocco
Namibia
Netherlands
New Zealand
Norway
Pakistan
Palestine
Peru
Philippines
Poland
Portugal
Russia
South Africa
Sri Lanka
Sweden
Switzerland
Taiwan
Tanzania
United Arab Emirates
United Kingdom
United States
Uruguay :
Business portal
Money portal :
vte :
Tax revenue is the income that is collected by governments through taxation. Taxation is the primary source of government revenue. Revenue may be extracted from sources such as individuals, public enterprises, trade, royalties on natural resources and/or foreign aid. An inefficient collection of taxes is greater in countries characterized by poverty, a large agricultural sector and large amounts of foreign aid.
Just as there are different types of tax, the form in which tax revenue is collected also differs; furthermore, the agency that collects the tax may not be part of central government, but may be a third party licensed to collect tax which they themselves will use. For example, in the UK, the Driver and Vehicle Licensing Agency (DVLA) collects vehicle excise duty, which is then passed on to HM Treasury.
Tax revenues on purchases come in two forms: "tax" itself is a percentage of the price added to the purchase (such as sales tax in U.S. states, or VAT in the UK), while "duties" are a fixed amount added to the purchase price (e.g., for cigarettes). In order to calculate the total tax raised from these sales, we must work out the effective tax rate multiplied by the quantity supplied.

## Taxation and state capacity

Taxation was a key task in any country as it advances state capacity and accountability. Charles Tilly identifies taxation as a form of extraction that allows the state to execute its primary functions: public policies (education, infrastructures, health care), state making, and protection. Taxation became indispensable in western Europe, when countries needed to fund wars in order to survive. This European model was later exported all around the world. Today, the level of taxation is used as an indicator of state capacity. Developed countries raise more taxes and therefore are able to provide better services. At the same time, the high taxation forces them to become accountable with their citizens, which strengthens the democracy.
Tax revenue from individual income tax is a greater percentage of tax revenues in developed countries than in developing countries.$^{:55}$ Tax revenues in developing countries rely more on taxes on goods and services than do tax revenues in developed countries.$^{:59}$

## Changes in taxation level

The effect of a change in taxation level on total tax revenue depends on the good being investigated, and in particular on its price elasticity of demand. Where goods have a low elasticity of demand (they are price inelastic), an increase in tax or duty will lead to a small decrease in demand—not enough to offset the higher tax raised from each unit. Overall tax revenue will therefore rise. Conversely, for price-elastic goods, an increase in tax rate or duty would lead to a fall in tax revenue.

### Laffer curve

The Laffer curve theorises that, even for price-inelastic goods (such as addictive necessary items), there will be a tax revenue maximising point, beyond which total tax revenue will fall as taxes increase. This may be due to:
* A cost limit on what can actually be afforded
* The existence of expensive substitutes (which become less expensive)
* An increase in tax evasion (e.g., through the black market)
* The shrinking of business caused by increased taxes
The Laffer curve, however, is not universally accepted; Paul Krugman referred to it as "junk economics".

## Revenue administration
### Public sector

A limiting factor in determining the government budget is the capacity to tax. Per capita income (PCI) is the most often used measure of relative fiscal capacity. But this measure fails to base tax capacity computation on other important tax bases like the sales and property tax and corporate income taxes. A representative tax system should assess the level of personal income, the value of retail sales and the value of property to compute fiscal capacity. To do so the average tax rate for each base is computed by dividing the total revenue derived by the total value of the base. Thus, as an example, income taxes collected would be divided by total income to yield a rate of taxation.
The averages of each tax base can be used in comparison to other states or communities, that is, the average of other states or communities, to determine whether or not a government compares favorably regionally or nationally. A state or community's standing on these various bases may affect its ability to attract new industry. The resulting rates, high or low in comparison, can become targets for change. The mission of revenue administration is to provide prudent and innovative revenue, investment and risk management and to regulate the use of government capital.
There are four core responsibilities for the revenue administrator:
* Manage and invest financial assets prudently
* Administer tax and revenue programs fairly and efficiently
* Manage risk associated with loss of public assets
* Regulate capital expenditure
New real estate development may not only enhance the economic base of a state or community, and it may also expand the tax base. It is not always the case, however, that new developments, especially if not properly planned, can in the aggregate, have a negative impact on the tax base. Economic development traditionally focuses on such things as job generation, the provision of affordable housing, and the creation of retail centers. Tax base expansion focuses primarily on maintaining and enhancing real estate values within the municipality. Municipalities tend to pursue economic development with religious fervor and often do not think strategically about the overall real estate impacts of their economic development initiatives. Yet the existing tax base in almost every municipality throughout the United States is an important source of revenue for funding municipal and school expenditures.
For public sector officials it is important to recognize the potential for a conflict between these two distinct, yet overlapping areas of public policy, and to establish procedures to achieve the proper balance in this regard. For real estate investors it is important to recognize when public policy is not fully cognizant of the impact of its actions on the real estate market, because of the potential negative impact on property values.
In summary, the concept of tax base management is really one of asset management and is particularly important in U.S. states where municipalities derive much of their revenue from their real estate assessments. City officials in Concord, New Hampshire found that a five percent overall increase in the assessed value of existing property would have the same impact on the tax rate as the addition of 2,000,000 square feet (190,000 m$^2$) of new industrial property or 1,000,000 square feet (93,000 m$^2$) of new office/R&D development, both of which are likely to take fifteen or more years to realize.
In addition to being responsible for managing the tax base, a community should also be responsible for helping to ensure economic prosperity for its citizens. These two goals can conflict unless a long-term view is taken regarding public policy actions, and unless the impact of alternate development actions and programs and priorities are not carefully evaluated. Good tax base management may lead to even better economic development, because investors and businesses will want to be in a community. Instead of offering incentives to attract business, they may be willing to pay to come to a community because it's a good place to live, work, shop and play.