Public Revenue – Tax and Non-Tax

What is government revenue?Tax and Non-Tax

The Public Finance Report is an in-depth study of all state-related financial activities and is also concerned with the full revenue and expenditure of the public authorities and administrative systems, modified together.
The principle of public finance encompasses public spending, public debt, and public revenue and profits.
Public revenue is precisely revenue obtained from government sources in order to meet the requirements of public spending.

What is the significance of government revenue?

Generally, public revenue applies to government revenue. Taxes, taxes, the selling of public goods and services, fines, contributions, etc. are some significant sources or ideas that are used in public revenue.

Tax and non-tax income are the principal sources of public revenue.
Public Revenue Sources

A) Revenue from Tax:

Tax is the primary source of public profits. In describing taxation, it is claimed that taxation is the compulsory imposing by government organizations of an obligation on public authorities to comply with the requirements of the general public as a whole.

Therefore, those points are illustrated as below with the previous section-defined term:

  • A tax is a mandatory obligation imposed by the state. If any person refuses to pay taxes, he can be fined or penalized.
  • Tax on the basis of a taxpayer essentially requires some comprehension and sacrifice
  • Tax is an obligation and not a penalty,
  • Most of the revenue is raised by the central government from taxation.

The wide tax divisions are direct and indirect taxes.

Direct taxes: Direct taxes are imposed on individuals’ or organizations’ wealth and income. Personal income tax, corporate tax, and gift or asset tax are such taxes. Direct taxes have an effect on the same person. Direct taxes are evolving in nature, and along with the tax base, the tax rate is rising. Progressive direct taxes, especially in growing countries, are involved in decreasing income discrimination.

The following significant direct taxes are listed:

  1. Tax on Personal Income:

Personal income tax is the obligation levied after unique allowable deductions on a person or group of individuals. As mentioned below, personal income taxes are planned:

Income (rs) Rate
0-1, 60,000 0%
1, 60,000 – 5, 00,000 10%
5, 00,000 – 8, 00,000 20%
8, 00,000 and above 30%

Senior citizens are excluded from income tax payments up to Rs: 2, 40,000.
Females are exempted from income tax payments of up to Rs: 1, 90,000,000

2. Charge on corporations:

  • Corporate tax is a charge to be levied on the earnings of registered corporate corporations.
  • Corporate tax is a direct tax since a legal entity is given to the corporation.
  • Present rates of corporate tax are:

30 percent + 7.5 percent surcharge for the Indian Organization.
40 percent + 2.5% surcharge for international organisations.

Corporate tax accounted for 40 percent of overall tax revenue in 2009-2010.

3. Other Taxes Direct:

  • Income tax, interest tax, gift tax, spending tax, etc. are a list of other direct taxes.
  • The proportion of such taxes is unimportant.
  • Taxes indirectly
  • On products & commodities, indirect taxes are levied.
  • Sales tax, excise duty, service tax, customs duty, VAT, etc. are included in these taxes.
  • The effect of indirect taxes on various persons can be inferred.
  • Indirect taxes are not egalitarian in nature, but regressive. Here, the responsibility of paying duties is borne by the customer indirectly or explicitly, irrespective of their level of income.
  • For developing countries and others facing low-income levels, indirect taxes are of paramount importance.

The Indirect Main Taxes:

A) Excise obligation:

  • Such taxes are imposed in India on manufactured products and consumables.
  • Excise duty is the primary and single largest source of tax revenue production.
  • Excise duty rates face a dropping trend

(b) Duty of Customs Duty:

  • This duty is levied on selective-range exports and on imports.
  • Custom duty has less value from a tax point of view,
  • The Custom Levy Peak Rate is 10%

c) Taxes on services:

  • This tax is levied on a certain group of corporations, entities or individuals.
  • Service tax rates have been gradually raised,

D) Tax on Goods and Service

  • Products and service tax includes a number of taxes, including excise duty, service tax, tax on products, VAT, etc.
  • In certain industries, it includes product and service costs.
  • The ambiguity of charges on goods and services is usually simplified.
  • Revenues that are non-tax
  • Non-tax income covers all sales other than government-accumulated taxes.
  • Non-tax revenue is a fund generated from internal sources

The revenue sources are:

  • Revenues from administration
  • Commercial profits
  • Grants and giveaways

Significant non-tax revenue sources include

A) Special Evaluation:

  • This can be called a fee for change,
  • This tax is levied on a certain group of community members who typically profit from government programs or public functions, such as road building, railways, parks, etc.
  • The government, therefore, imposes special charges on such assets.

b) Public Companies Surplus

  • Public sector enterprises dealing with commercial operations have been arranged by the government.
  • A significant source of non-tax revenue is the surpluses produced by these enterprises.
  • These sales are in the form of profits known as economic income.

C) Charges:

  • A fee is a major source of non-tax managerial profits paid to members of the public by government agencies for representation services.
  • There is no compulsion for fees to be charged. All of those services used can pay fees.
  • For obtaining licenses, passports or registrations, filing of court cases, etc., fees can be paid.

d) Penalty and Fine

  • These are generic sources of non-tax administrative income.
  • For non-compliance with such laws and regulations, this can be applicable to the public.
  • These are not seen as the government’s primary source of revenue.

(e) Grants and Gifts

  • Grants are financial support for funding
  • These are provided to the public authority for some social activities to be carried out.
  • The higher public authority creates these for lower ones
  • E.g. E.g. World Bank loans to State Bank grants
  • There is no compulsory repayment.
  • Gifts and gifts are made to the Central Government voluntarily by individuals, organizations, or foreign governments.
  • In the event of disasters or natural calamities, these gifts are created by natural feelings
  • Gifts are not known to be a revenue source.
  • In order to raise government revenue, tax, therefore, plays an important role. In developing income, non-tax is important.

Changing patterns in India’s tax and non-tax revenues

In order to fulfill its expenditure from tax and non-tax revenue sources, the Government elevates economics. Government spending, as a matter of fact, goes beyond government revenue, resulting in budget inconsistencies.

Changing tendencies

A.) Income from taxes

  • It establishes and divides the tax structure as follows:
  • Central Government: levies income taxes, excluding customs duties on agricultural income, central excise duty and tax on utilities.
  • STATE GOVERNMENT: Taxes are levied on state excise duty, agricultural revenue, VAT, land income tax and skilled tax.
  • LOCAL GOVERNMENT BODIES: Octroi, land tax, and tax are charged for services such as the provision of water, sanitation, etc.
  • Some reforms have been confronted by the Indian tax structure and system. These changes include a reduction in the rate of all major taxes, which simplifies laws and regulations and procedures, administration modernization, and machinery for compliance.

Benefit from Mainland Tax is:

Tax income patterns:

  • With the reduction of the tax rate, clear procedures, and a fast GDP growth rate, tax rate collection has increased.
  • The share of the Central Government’s total tax revenue as 1 % of GDP is a steady 9% to 10%.
  • In contrast with developing or developed countries, this is a low pace.
Year Tax Revenue Rate
1990-1991 57,576 10%
2002-2003 216266 8.8%
2009-2010 641979 10.4%

Trends in taxes that are overt and indirect:

  • Taxes were more than 70 percent of income before liberalization
  • This pattern has been reversed because of economic growth since 1990-91 (post-liberalization).
  • Owing to an increase in corporate tax and personal income tax, direct taxes contributed considerably.
Year Direct taxes Indirect taxes
1990-1991 19.1 80.9
2004-2005 43.3 56.1
2009-2010 57.7 42.0

Direct Tax Patterns

  • Direct tax shares are raised
  • The Income and Wealth Tax Laws will be replaced by the Direct Tax Code and will be effective from April 1, 2011.

Principal direct taxes:

  • Charge on Corporate Profits
  • In order to collect taxes and to make a contribution to overall tax revenue, this is the most significant direct tax.
  • The contribution of direct tax since liberalisation has been increased:
Year % Of Total Tax Revenue Rs. Crores
1990-1991 9.3 5335
2004-2005 27.1 82680
2009-2010 40.0 256725

PERSONAL TAX OF INCOME:

  • Direct income tax collection has risen steadily since 1990-1991.
  • Personal income tax payments have also increased,
Year % Of Total Tax Revenue Rs. Crores
1990-1991 9.3 5371
2004-2005 16.2 49268
2009-2010 17.6 112850

Direct Tax Patterns

  • The overall share of central government-related indirect taxes has dropped.
  • There are three major indirect revenue-generating taxes.
  • Excise responsibility
YEAR Rs. CRORES % OF TOTAL TAX REVENUE
1990-1991 24,514 42.6
2004-2005 99,125 32.5
2009-2010 1,06,477 16.6

#CUSTOMS DUTY:

YEAR Rs. CRORES % OF TOTAL TAX REVENUE
1990-1991 20,644 35.9
2004-2005 57,611 18.9
2009-2010 98,000 15.3

# SERVICE TAX (INTRODUCED IN 1994-95)

YEAR Rs. CRORES % OF TOTAL TAX REVENUE
1990-1991 862 0.8
2004-2005 14,200 4.7
2009-2010 65,000 10.1

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