CHAPTER ONE
1.0     INTRODUCTION
Public finance is a field of economics concerned with how government raises money, how that money is spent and the effect of these activities on the economy and on the society.
Expenditure and revenue of the country fall under the topic, public finance. However, in a developing economy like Nigeria, management of moderate deficit financing is tailored toward useful and development oriented projects. This necessitated me to focus attention on the amount of expenditure and revenue generated in Nigeria over the past years.
Government generates revenue from various economic sectors: these are divided into oil and non-oil revenue:
1.     Oil Revenue: This is the revenue generated from oil sectors of the economy which comprise:
a.           Petroleum profit tax and royalties
b.           Others which include revenue from export sales, domestics sales, tax on petroleum products, rents etc.
2.     Non Oil Revenue: This is revenue generated from other sectors of the economy other than the oil sector which comprises of:
a.     Company income tax
b.     Custom and exercise duties
c.      Value added tax (V.A.T)
d.     Federal government independent revenue which comprises revenue from interest payments rents on government properties, personal income tax of armed forces, police, external affair and federal capital residents
e.      Other which include custom levies, education tax etc.
The revenue generated from different sectors of the economy is allocated to:
1.           Federation accounts which include transfer to federation accounts from domestic oil sales
2.           Value added tax (VAT) pool accounts
3.           AFEM surplus account
4.           Petroleum Trust Fund
5.           JVC Payment account
6.           External debt service funds
7.           National priority projects fund
8.           Other which include transfers to special and excess reserves and education fund