Skip main navigation

Introduction: sources of revenue

A short animation to illustrate the link between economic activity and public sector revenues.
14.6
The amount of economic activity there is has a direct effect on the amount of public sector revenue. When people are spending, it goes up and up. But when times are tough, it follows suit. This is because public sector revenue depends on tax. Tax on what you earn, tax on what you buy, tax on the home you own … the list goes on. There are direct taxes, which are paid to the government because of the income you earn or the property you have, and indirect taxes, which are typically levied on producers or retailers, but whose burden is largely carried by consumers.
56.9
You might not know it, but during the last decades there’s been a remarkable growth of VAT revenues in the world, as more and more countries adopt this tax. The rest of revenues for the public sector largely originate from personal income tax and corporate income tax.

How does economic activity affect public sector revenues?

This short animation introduces our discussion on taxes and their use in raising public monies.

This article is from the free online

Understanding Public Financial Management: How Is Your Money Spent?

Created by
FutureLearn - Learning For Life

Our purpose is to transform access to education.

We offer a diverse selection of courses from leading universities and cultural institutions from around the world. These are delivered one step at a time, and are accessible on mobile, tablet and desktop, so you can fit learning around your life.

We believe learning should be an enjoyable, social experience, so our courses offer the opportunity to discuss what you’re learning with others as you go, helping you make fresh discoveries and form new ideas.
You can unlock new opportunities with unlimited access to hundreds of online short courses for a year by subscribing to our Unlimited package. Build your knowledge with top universities and organisations.

Learn more about how FutureLearn is transforming access to education