Categories
Economics

GOVERNMENT EXPENDITURE

GOVERNMENT EXPENDITURE

Government expenditure refers to total expenses incurred by the public authorities at the federal, state and local government levels.

CLASSIFICATION OF GOVERNMENT EXPENDITURE

  1. Capital Expenditure: Capital expenditure are expenses on projects which are permanent in nature .Such as construction of roads and bridges, building of houses, school, hospitals etc.
  2. Recurrent Expenditure: Recurrent expenditure are those expenses which are repeated on yearly or regular bases. In this case, they are not permanent. Such expenditure includes money spent on salaries, electricity bills, maintenance of infrastructures etc.

OBJECTIVES OF MAIN AIMS OF GOVERNMENT EXPENDITURE

  1. Defence: The government of every country spends huge sum in defending its territorial integrity.
  2. Maintenance of internal peace and security: To achieve these, the police, courts and prisons have to be fully equipped and maintained.
  3. Food and Agriculture: West African countries spends more money is agricultural sector, because, it is the back-bone of their economies apart from providing food for their citizens.
  4. Political Expenditures: A lot of money is spent in maintaining the army of politicians and their political instruments like political parties, legislatures etc.
  5. Economic Expenditure: These expenses are in the areas of industries, miming, trade, transport and communication etc.
  6. Social Service Expenses: The government of every country allocates a huge sum of money for the provision of social amenities to the people in return for taxes they paid.
  7. Expenses on servicing on loans: Paying interest on borrowed money as well as paying part or all the principal amount borrowed internally and externally reduce the huge sum of money for government purse.

Assignment (Post your answer and question title using the box below for evaluation and discussion)

What are the problems associated with tax collection?

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