Question

Difference between tax revenue and non tax revenue

Answer 1

Taxes are the most important sources of public revenue. It is compulsory to pay them to the government and if not paid, it is a punishable offence.

The government collects Tax Revenue from the public in two forms – Direct taxes and Indirect taxes.

Direct Taxes – They include the Wealth tax, Corporate tax, Personal income tax, and Capital gain tax.

Indirect Taxes – They include Central excise duty, Service tax, VAT, and custom duty.

The revenue that is obtained by the government from sources other than the taxes is called as Non-tax revenue. 

Examples of Non-tax revenues are fees, penalties, fines, grants and gifts, surplus amounts from Public enterprises, and deficit financing.