Distinguish between tax revenue and nontax revenue
Answers
Taxes are the first and foremost sources of public revenue. Taxes are compulsory payments to government without expecting direct benefit or return by the tax payer. A tax is a compulsory payment made to the government. Taxes collected by Government are used to provide common benefits to all mostly in form of public welfare services.Refusal to pay the tax is a punishable offence. The government collect tax revenue by way of direct & indirect taxes. Direct taxes includes; Corporate tax; personal income tax capital gain tax and wealth tax. Indirect taxes includes custom duty, central excise duty, VAT and service tax.
The revenue obtained by the government from sources other then tax is called Non-Tax Revenue. The sources of non-tax revenue are fees, fines or penalties, Surplus from Public Enterprises, Special assessment of betterment levy, Grants and Gifts and Deficit Financing