- Other than these direct tax sources, VAT is a major indirect sources of government revene. This is collected indirectly from the consumers of the country
- In the USA, the mentionable government revenue sources are- Property Taxes, Sales & Gross Receipts Taxes, Individual Income Taxes, Corporate Income Taxes, Other Taxes
- In the UK, VAT, Income tax, National Insurance, Corporation tax, Capital gains tax, Motoring taxes, Inheritance tax, Stamp duty etc are major sources
- The taxes that generate the most revenue in Australia are: individual income tax at $170 billion or 39.3% of all revenue, income tax on enterprises at $77 billion or 17.7% of all revenue, GST at $55.5 billion or 12.8% of all revenue.
Public revenue is otherwise known as Government Revenue. Collection and utilization of public revenue is one of the most important function of the government. Any Government collect funds form different sources of public revenue. Following are the main sources of public revenue available to modern Governments:
(1) Taxes: It is one of the most important sources of public revenue. According to P.E. Taylor, “taxes are compulsory payments to Government without expectation of direct return or benefit to the tax payer”. It is a compulsory contribution of a citizen for the service of the Government towards public expenditure. Thus, a tax possesses the following characteristics-
(a) It is a compulsory payment to the state and therefore every person on whom it is levied is bound to pay without any obligation.
(b) It is paid by an individual without reference to direct or special benefit to him from the Government in return.
(c) The tax is paid by the tax payer to enable the Government to incur expenditure in the common interest of the society.
(d) There is no direct relationship between the tax paid and benefit received by him.
(2) Commercial Revenue or Prices. The price is the payment of goods and services sold to them by the government. For example, fares and freights charged by the railways or roadways for transport services or electricity charged paid by citizens for electricity consumption etc. Revenues which are derived by the Government from public enterprises by selling their goods and services are also included in commercial revenues. There is a definite relationship benefit the benefit received and the price paid for the benefit. Thus, price is the payment for economic services of the Government.
(3) Fees. Fee is the payment made by citizen for non-economic services rendered by the Government. It refers to a payment for special benefits received by a fee-payer. Fee is a payment for services rendered for the benefit of the whole society. For example, court fee is charged from those citizens who go for justice in the court and is based on the merit of the case i.e. on the magnitude of the benefits. received by the payer.
(4) License Fee. A license fee is paid in such cases where the Government authority confer a permission or a privilege rather than to perform a service of a more tangible and definite sort. Registration fee is one of the examples of this kind of revenue.
(5) Special Assessment. Where the Government provides certain services to the residents of a particular locality by which the value of the properties of residents increases, the Government or the authority may impose a special type of levy based upon the increase in the value of properties, on the residents of that very locality which is known as special assessment or better merit levy. This type of levy may be paid either once and for all or may be paid annually. For example, if a municipal corporation in a city builds roads or makes arrangement for the supply of electricity and water in a particular locality, the value of property in that locality may inevitably go up. To that extent, the residents will be directly benefited. In such a case, the municipal corporation may impose a special levy on residents to make up the expenses on such services because the value of their properties has gone up.
(6) Fine and Penalties. Fine or penalty refers to the punishment for the infringement of laws of the country. The income from this source is not however, an important and major source of revenue.
(7) Gifts and Grants. Sometimes and particularly in war time and emergency, individuals offer funds by way of gifts or donations, to meet the abnormal situations to the Government. The amount of the income is, however, not very significant. Further, the Government of a country may receive grants or donations from foreign Governments or international agencies etc. for general and specific purposes.
(8) Excise and Customs Duties. Practically, both are vital sources of public revenue. The excise duties are also levied on the production of certain commodities, generally on those commodities which harm to the health and well-being of the citizens, like cigarettes, opium, wine and other intoxicants belonging to this category. The main object of such duties is to discourage the production and consumption of such commodities in the interest of the country men in modem times. The Government imposes such duties on certain other goods with a view to earn income. So, customs duties (i.e. duties for imports and exports) are also levied to regulate the flow of commodities in and from the country in the best interest of the community. The Government earns a size able amount from this source.
(9) Government Properties. Modern Governments also earns some income from properties owned by them. For example, royalty income from mines and oilfields, fisheries etc. the revenue from forests and the income from landed property can be included under this source.
(10) Escheat. Under the rights of escheat, the Government may acquire the properties of a person who dies without any legal heirs or without keeping a will. But it forms a very insignificant part of total revenue of the state. Thus, there are number of sources of public revenue or otherwise termed as the sources of Government revenue.