Distribution of Non Tax Revenues

This article also consists of some information based on tax revenue and non-tax revenue. Tax revenue is mainly gained by the specific government based on different countries through taxation that is a part of the Receipt which comes under the Annual Financial Statement of the Union Budget. Besides this non-tax revenue defines that income that is also earned by the government through other sources apart from taxes.

Polity

In India there are many rules and regulations that are related to taxation which takes from a variety of sources. Taxes in India are imposed by the central government and the state government who are mainly involved in the implementation and also safeguard the payment or non-payment of taxes. Various types of tax are included in India’s agriculture, business and others like Service tax, Income tax, Property tax, Local body tax and others. Moreover, while managing all these taxations there also create some issues that have to be faced by the government, especially taxes on wealth, labor income, eco tax and others.. However, most of the time it can be seen that people are giving tax by purchasing any kind of products and services and that is called as the indirect tax. On the other hand, the direct taxes are directly deducted from the incomes and other purposes.  

Apart from this, tax is imposed against the services that are provided by the Indian government including interest on loans based on purpose. The government collects non-tax revenue as fees, fines, interest, dividends, penalties, forfeits and other voluntary transfers.

Non-Tax Revenue

Moreover, it can state that taxation is a primary source of income for the Indian government, though it can be seen that there are few sources of tax revenue whereas sources of non-tax revenue are many. In one sentence non-tax revenue is based on the charges that are provided by the government to generate their income based on goods and services. The amount of income is always related to the tax that individuals have to pay because those deductions are permitted by the government. This taxation process is sometimes based on ownership, wealth, leadership, and others, especially when payments are pointed out for social security.

However, the government earns some reappeared income from different types of sources such as railways, loans, roads and more things from that non-tax revenue and of these are most important factors of non-tax revenue. Moreover, it is made for the alternative factors of revenue and receipts that helps to generate all liability factors in a country.

Non-Tax Revenue Example

Non-tax revenue also includes a collection of amounts that comes from interest on the loans, funds, penalties and others. However, for example, non-tax revenue is when a country’s citizens use various services that are proposed by the government, they have to pay bills that are considered as non-tax revenue. Apart from this, there are various services distributed by the government including electricity, police service, municipal services and more which become the sources of non-tax revenue. Moreover, when taxes are taken on the use of property, residence, social circumstance and others are always counted as non-tax revenue in India. Moreover, when citizens use government-provided services they have to pay an amount as a tax based on government-provided infrastructure, considered as non-tax revenue. 

Difference between Tax Revenue and Non-Tax Revenue

There is a considerable difference between tax revenue and non-tax revenue in the Indian environment, which states that every state needs to observe their non-tax revenue which is not so significant at total revenue collection. Besides this, there is a huge difference between tax and non-tax revenue that is when an individual is charged on income received from an entity is called direct tax. On the other hand, when the value of any transaction is based on any specific products, goods and services fall in indirect tax. However, in tax revenue, income taxes are simply inflicted on the income of an individual that is earned during an entire year. Besides this, taxes based on construction, supply, buildings, services, are considered as non-tax revenue or indirect tax on permission to use all those goods and services. Taxes that are applied on goods or services when any products are bought and sold then tax revenues are used like GST, VAT and more.

Conclusion

Hence, it is concluded from the above study that collecting tax is one of the major function of the government to generate their income in any country. However, it also states that the taxation process of every country is dependent on two different approaches including tax revenue and non-tax revenue. Both these processes are used by the government to finance various government activities in different states. Moreover, after evaluating the above article it also refers that total tax revenue is dependent on a percentage of GDP that holds the country’s output. Hence it is also summarized from the above study that there are various types of taxes including above two approaches that are collected by the governments.