ABSTRACT
This chapter discusses the various sorts of income available to PBEs. Begins with a definition of taxation and explains a number of different types of taxes and some associated theoretical aspects of taxation. A value added tax (VAT) is tax that is levied on the value added at each of the manufacture and supply of goods and services. Taxes are the 'involuntary extraction of resources' to finance a government's expenditure. The prevention of human suffering that can result from such unequal distribution is a justification for the provision of a minimum level of public services. Buoyancy measures how quickly the yield from a tax rises or falls as the tax base rises or falls. The forerunner of modern income taxes was the income tax levied in Great Britain 1799, to raise money to finance the Napoleonic wars. A fine is a non-exchange transaction. Lotteries are a form of gambling where tickets are sold and prizes awarded to the winning tickets.
