The sources of non-tax revenue are:
(I) 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.
(II) Fine:
- A fine is a penalty imposed on an individual for violation of law.
- For example, violation of traffic rules, payment of income tax after the stipulated time etc.
(III) Earnings from Public Enterprises:
- The Government also gets revenue by way of surplus from public enterprises.
- Some of the public sector enterprises do make a good amount of profits.
- The profits or dividends which the government gets can be utilized for public expenditure.
(IV) Special assessment of betterment levy:
1. It is a kind of special charge levied on certain members of the community who are beneficiaries of certain government activities or public projects.
2. For example, due to a public park or due to the construction of a road, people in that locality may experience an appreciation in the value of their property or land.
(V) Gifts, Grants and Aids:
- A grant from one government to another is an important source of revenue in the modem days.
- The government at the Centre provides grants to State governments and the State governments provide grants to the local government to carry out their functions.
- Grants from foreign countries are known as Foreign Aid.
- Developing countries receive military aid, food aid, technological aid, etc. from other countries.
(VI) Escheats:
It refers to the claim of the state to the property of persons who die without legal heirs or documented will.