Revenue and Capital Receipts

Government receipts are classified according to their effect on the government's assets and liabilities. Revenue receipts neither create a liability nor reduce an asset, whereas capital receipts either create a liability or reduce an asset.

Revenue receipts

Revenue receipts constitute the government's current income and are available without a corresponding increase in debt or sale of assets.

• Tax revenue includes receipts from taxes such as income tax, corporation tax, customs duties and Goods and Services Tax.
• Non-tax revenue includes interest receipts, dividends and profits from public enterprises, fees, fines and other administrative receipts.

Capital receipts

Capital receipts alter the government's balance sheet by increasing liabilities or reducing financial or physical assets.

• Debt-creating capital receipts include market borrowings and other loans raised by the government, because they create repayment obligations.
• Non-debt capital receipts include recovery of loans and proceeds from disinvestment, because they reduce government assets without creating fresh debt.

Budgetary significance

The distinction helps assess whether current expenditure is being met from current income and how far government spending depends on borrowing or asset reduction.

• Revenue deficit is the excess of revenue expenditure over revenue receipts; it indicates a shortfall in financing current expenditure from current receipts.
• Fiscal deficit equals total expenditure minus revenue receipts and non-debt capital receipts; it broadly represents the government's borrowing requirement.
• A receipt is classified by its economic effect, not merely by whether it occurs regularly or is large in amount.