Tax And Non Tax Revenues
Financing of the government is a matter of universal concern, for practically everyone anyone some advantage from the services of governments and also contributes to their support. The modern-day state is a welfare state and the state is looked upon as a protector, provider, entrepreneur, economic controller and arbiter. Such a wide range of functions requires massive funds. Where do these funds come from and how are they to be allocated? Answer to my question can be found in the realm of Public Finance.
Public Finance deals with the income and expenditure of public authorities. The word public is is used to signify the government’ or ‘State’. Public authorities include all sorts of governments. Hence it can be said that it deals with the finances of the governments Central, State and Local that are studied in the science of Public Finance. According to Prof. Dalton, Public Finance is concerned with the income and expenditure of public authorities and with the adjustment of one to another”.
Public Expenditure is necessary for the government to perform various functions for the welfare of the society, so it requires public revenue. Public revenue holds the same position in the study of public finance, which production holds in the study of economics. Just as production is the means of consumption, public revenue is the means for public expenditure. The income of the government through all sources is called public income or public revenue. Public revenue includes income from taxes, prices of goods and services supplied by public enterprises, revenue from administrative activities, such as fees, fines, etc., and gifts and grants.
Sources Of Public Revenue
The various forms of sources of Public revenue, i.e., taxes, commercial revenues, administrative revenues, grants and gifts.
Taxes are compulsory payments to governments without expectation of direct return or benefit to the taxpayer.
The revenues, which we call “commercial” are received in the form of prices paid for government-produced commodities and services, i.e., revenues, which are derived by the government from public enterprises by selling their goods and services, are called commercial revenues.
They are also known as prices because they come in the form of prices of goods and services provided by the government. They include payments for postage, tolls, interest on funds borrowed from the government credit corporations, prices paid for liquor in government stores, electricity distributed by the government, railway services and the like.