Tax Revenue:
A fund raised through the various taxes is referred to as tax revenue.
Taxes are compulsory contributions imposed by the government on its
citizens to meet its general expenses incurred for the common good,
without any corresponding benefits to the tax payer. As Taussig puts
it, the essence of a tax, as distinguished from other charges by
government, is the absence of a direct quid pro quo between the tax
payer and the public authority.
Non-Tax Revenue:
Public income received through the administration, commercial
enterprises, gifts and grants are the source of non-tax revenues of the
government.
Thus, nontax revenue includes:
(i) Administrative revenue
(ii) Profit from state enterprises
(iii) Gifts and grants
Administrative Revenues:
Under public administration, public authorities can raise some funds
in the form of fees, fines and penalties, and special assessments.
Fees:
Fees are charged by the government or public authorities for
rendering a service to the beneficiaries. To quote Seligman, A fee is a
payment to defray the cost of each recurring service undertaken by the
government, primarily in the public interest, but conferring a
measurable advantage to the payer.
Court fees, passport fees, etc., fall under this category. Similarly,
licence fees are charged to confer a permission for something by the
controlling authority, e.g., driving licence fee, import licence fee,
liquor permit fee, etc. Fees are to be paid by those who receive some
special advantages. Generally the amount of the fee depends upon the
cost of services rendered.
Fees are a bye- product of the administrative activities of the
government and not a payment for a business. Thus, fees are distinct
from prices. Prices are always voluntary payments, but fees are
compulsory contributions, though both are made for special services.
Sometimes a fee contains an element of tax when it is charged high in
order to bring revenue to the exchequer e.g., a licence fee.
Fines and Penalties:
Fines and penalties are levied and collected from offenders of laws as
punishment. Here the main object of these levies is not so much to
earn an income as to prevent the commission of offences and
infringement of laws of the country. Fines and penalties are arbitrarily
determined and have no relation to the cost of administration or
activities of the government. Hence, collections from such levies are
insignificant as a source of public revenue.
Special Assessments:
A special assessment, as Seligman points out, is a compulsory
contribution levied in proportion to the social benefits derived to
defray the cost of a specific improvement to property undertaken in
the public interest. That is to say, sometimes when the government
undertakes certain types of public improvements such as construction
of roads, provision of drainage, street lighting etc., it may confer a
special benefit to those possessing properties nearby.
As a result, values of rents of these properties may rise. The
government, therefore, may impose some special levy to recover a part
of the expenses so incurred. Such special assessment is levied