Tax revenue is the money amassed by governments from their citizens in the form of taxes. The actual tax money collected from a citizen or business varies with their earning potential. A government’s primary sources of tax revenue are payroll taxes and income taxes. Estate tax, excise tax, etc. are the other sources. Typically, more than half of the revenue is courtesy individual income taxes. Next comes payroll taxes, shared by the salaried individual and his/her employer. Corporate tax comes in next, with excise, estate and other taxes to follow. 

Tax money is essential for the smooth functioning of any government and to provide proper infrastructure (roads, bridges, public amenities, etc.) and environment to the people. The money is also used to sponsor defense and social welfare programs. Because tax revenue is imperative for any government to offer its citizens proper living and business environment, penalties are levied or strict actions taken against individuals who do not pay tax money promptly.   

Generally, a country’s GDP has a major influence on its tax revenue. In other words, higher GDP means a bigger tax base, which translates to more tax revenue. Wherever a government plays a major role in overall state or country development and primarily contributes to the state’s education, social assistance and healthcare sector, it means its tax revenues are high.