Fiscal Effort

DEFINITION of 'Fiscal Effort'

The amount of revenue collected by a government, often shown as a percent of the fiscal capacity. This value creates an estimate of the total amount the government could collect in revenue.

BREAKING DOWN 'Fiscal Effort'

The amount that a government collects in revenue, mainly taxes, is dependent on several factors. This includes the tax rates for individuals and businesses, and the tax breaks and exemptions offered to the population. The fiscal effort is also determined by the government's ability to enforce tax laws and collect the taxes.

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RELATED FAQS
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  3. What are some examples of expansionary fiscal policy?

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  4. In which industries is Average Collection Period most important?

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  5. How is cash flow affected by Average Collection Period?

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