Wednesday, 30 November 2016

Source of Public Revenue

Sources of public revenue

  • Taxes:
Taxes are the major source of public revenue or government income. Tax can be defined as.
Tax is a compulsory contribution by the people to government treasury to meet the expenditure of the government for, the common benefit of the people.
A government collects taxes and spends them on social welfare e.g. to provide facilities to the people living in the country. There are two characteristics of a tax.

  • Firstly:
Tax is a compulsory payment made by the people. It is illegal and punishable to refuse payment of tax.

  • Secondly:

The amount of money collected from taxes is spent on social welfare. A tax-payer cannot demand for a dirt personal benefit from the government in return for payment of tax.

  • Fee:

The government provides some direct services to the people and charges money in return for these services, it is called fee. For example license fee, registration fee, fee of vehicles. Court fee etc.

  • Price:

The government sells some goods and services and charges their price. For example, it sells petroleum. Gas or forest wood etc. In the some way, it sells post-cards, envelops, electricity, services of railway and PIA, telephone, telegraph etc.

  • Special assessment:

Sometimes, a government spends money to provide facilities to a certain area. For example, it builds roads, provides facility of gas or electricity, establishes schools and colleges. Because of these facilities, the value of property, houses and lands in that area increase and it results in increase in the incomes of their owners.

  • Fines:

The people who disobey state laws, they are punished through fines. These fines are also a source of public revenue.

  • Government property:

A government also gets income from its properties. For example it gets the rent of mines. Government land is given on rent and buildings are hired by the people from the government. Some times government sells its property also.

  • Gifts and Aid:

The foreign governments present gifts to the government of a country, which become a source of public revenue, The foreign governments also give financial aid to a country in case of some natural calamity e.g. flood, storm, earth-quack, famine etc.

  • Properties of Heirless:

If an heirless person dies and he makes no will about his property before his death, the government takes over his property, which becomes a permanent source of its revenue.

  • Local rate:

The local governments levy taxes on the local people to meet their needs. For example, town committees, municipal committees, municipal corporations, tehsil councils and district councils levy some taxes on the local residents these taxes are called local rates. The amount collected through local residents. These taxes collected through local rates are spent in the same locality. These rates are different in different areas.

  • Receipt of loan and interest:

A government also takes loans from internal or external sources. These loans are also a part of its income or revenue. Moreover, it lends money for the development of agriculture and industry to the people. It charges a certain amount of interest on them