The tables below show the expected revenues and projected expenditures from the budget of a hypothetical country in 1998. Use the information in the tables ...

Answer Details

(a) Revenue by source

• (i) Direct taxes = Company income tax + Personal income tax \(= 150.00 + 80.00 = \$230.00\) million.
• (ii) Indirect taxes = Customs and excise duties + Value added tax \(= 300.20 + 100.00 = \$400.20\) million.
• (iii) Non-tax sources = Rents, royalties and profits + Fees and specific charges \(= 75.00 + 60.80 = \$135.80\) million.

(b) Expenditure by type

• (i) Capital expenditure = Building of schools and hospitals + Road construction \(= 200.00 + 180.90 = \$380.90\) million.
• (ii) Recurrent expenditure = General administration + Maintenance of foreign missions + Transfer payments \(= 220.10 + 50.00 + 65.00 = \$335.10\) million.

(c) Surplus or deficit

Total revenue \(= 75 + 150 + 300.20 + 80 + 60.80 + 100 = \$766.00\) million.

Total expenditure \(= 380.90 + 335.10 = \$716.00\) million.

\[766.00 - 716.00 = +\$50.00\ \text{million}\]

Revenue exceeds expenditure, so the budget is a surplus of \$50 million.