ELI5: Explain Like I'm 5

Fiscal capacity

Fiscal capacity is the amount of money that a government has available to spend on things they need like roads, schools, hospitals, and other things that help the people living in their country. Governments get money to spend by collecting taxes from the people who live in their country. The money they collect goes into the government's fiscal capacity, which can then be used to pay for important things for the citizens.