vulekamali home / Learning Resources / Guides / Division of revenue raised nationally Division of revenue raised nationally Overview The Constitution provides for the division of revenue between and among the three spheres of government on an annual basis (Sections 214(1)(a) to (c). See the Budget Highlights and Budget Review for the sources of nationally-generated revenue. Provincial and local governments can also generate their own revenue. See the provincial department budget documents and the municipalities on Municipal Money for a summary of their various revenue sources.While the Equitable Share allocates more money to the National sphere (national government departments), much of that is then transferred to provincial and local governments via Direct Charges to the National Revenue Fund and Conditional Grants. Conditional grants Conditional grants are administered by national government departments and allocated to provincial and local governments for their specific purpose based on an accepted business plan for the grant's use. See the frameworks for conditional grants to municipalities and provinces. You can find the allocations for each conditional grant in the annexures and schedules of the Division of Revenue Bill. Note: This shows the Division of Revenue Bill and does not include the adjustments in the Division of Revenue Amendment Bill [Bill 09 of 2020] tabled along with the Supplementary Budget. Allocation of equitable share by sphere of government The national revenue fund is allocated to National departments, Provincial budgets, and Local government budgets according to the Equitable Share formula. This formula takes various local and national factors into account, including demographic information like population size and age. See the Budget Review for details of the equitable share formula used in a particular year. Loading... Allocation of equitable share to provinces The allocation of equitable share to provincial government budgets shows how much each provincial government will receive of the provincial sphere’s allocation. Loading... Allocation of equitable share to municipalities The allocation of equitable share to local government budgets shows how much each local, metropolitan and district municiaplity will receive of the local sphere’s allocation.The local sphere is allocated the smallest portion of the allocation to spheres because it has the capacity to raise its own revenue, for example via municipal rates and fines. However, each municipality’s share of the local sphere allocation takes local conditions into consideration, including the number of poor households and the cost of free basic services. Loading...