Current Receipts
Current receipts (also called revenue received) are those sources of inflows of money which do not create any liability of repayment on the government.
- For example: A government collects revenue by way of taxes. Revenue so raised is not to be ever returned to the taxpayers. Similarly, a government owns many production enterprises which are known as Public Sector Undertaking (PSUs). The profit earned by these enterprises from part of the income of a government. These are not to be returned to PSUs.
- Current receipts of government take to forms, viz.,
(a) tax revenue, and
(b) non tax revenue
(a) Tax Revenue:
Meaning
Tax is a compulsory payment by the citizens to the government to meet the public expenditure. It is legally imposed by the government on the tax payer and in no case tax payer can refuse to pay taxes to the government.
Definitions
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Characteristics of Tax
- A tax is a compulsory payment made to the government. People on whom a tax is imposed must pay the tax. Refusal to pay the tax is a punishable offence.
- There is no quid pro quo between a taxpayer and the public authorities. This means that the tax payer cannot claim any specific benefit against the payment of a tax.
- Every tax involves some sacrifice on the part of the tax payer.
- A tax is not levied as a fine or penalty for breaking law.
Some of the tax revenue sources are
- Income tax
- Corporate tax
- Sales tax
- Surcharge and
- Cess
(b) Non-tax revenue:
Revenue mobilized by the government from all sources other than taxes constitutes non tax revenue. Of the two sources of revenue, tax revenue is generally more important than non-tax revenue.
The major source of non-tax revenue receipts can be conveniently tabulated as
(a) Commercial revenue:
It is the revenue received by a government in the form of prices paid for the government-supplied commodities and services. This includes payment for postage, railways, electricity, toll, interest on funds borrowed from the government, etc.
(b) Dividends:
These are paid out by public sector enterprises out of the surplus income generated by them.
(c) Administrative revenue:
It is the revenue that arises on account of the administrative functions of a government.
Some of the different forms of administrative revenue are as follows:Fees: Fees are another important source of revenue for the government. A fee is charged by public authorities for rendering a service to the citizens. Unlike tax, there is no compulsion involved in case of fees. The government provides certain services and charges certain fees for them. For example, fees are charged for issuing of passports, driving licenses, etc. Earnings from Public Enterprises:
License Fees:
Fines and Penalties:
Special assessment of betterment levy:
Gifts, Grants and Aids:
Forfeitures:
Escheat:
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(d) Grants from abroad:
Occasionally, a country receives grants and donation from governments and philanthropic organisations situated abroad.
