Hypothecated tax

The hypothecation of a tax (also known as the ring fencing or ear marking of a tax) is the dedication of the revenue from a specific tax for a particular expenditure purpose. Hypothecation is the pledging of assets.

A common example in many European countries is a television licence. Here, all owners of television sets are obliged to pay the government an annual fee to use their televisions. The proceeds of the levy are then used to fund public broadcasting.

Various Chinese imperial armed forces including the Beiyang Army were assigned the customs revenues of their region.