Question

Difficulty: EasySources of Government Revenue

In a fiscal quarter, a local government authority in Nigeria collected the following receipts:
- Market stall fees: ₦12 million\text{₦}12\text{ million}
- Tenement rates (property tax): ₦35 million\text{₦}35\text{ million}
- Fines and penalties: ₦8 million\text{₦}8\text{ million}
- Motor park fees: ₦10 million\text{₦}10\text{ million}

What is the total non-tax revenue collected by the local government authority in millions of Naira (₦\text{₦})?

Answer: 30 million Naira

Answer

The total non-tax revenue collected by the local government authority is 30 million Naira.
Non-tax revenue consists of public income derived from sources other than taxation, such as user fees, license charges, fines, and commercial earnings. Market stall fees (₦12 million\text{₦}12\text{ million}), fines and penalties (₦8 million\text{₦}8\text{ million}), and motor park fees (₦10 million\text{₦}10\text{ million}) are non-tax items, giving a total of ₦30 million\text{₦}30\text{ million}. Tenement rates are a direct tax on property and must be excluded.

Step-by-Step Solution

1
Identify non-tax revenue components from the given financial receipts
Market stall fees (₦12 million\text{₦}12\text{ million}), fines and penalties (₦8 million\text{₦}8\text{ million}), and motor park fees (₦10 million\text{₦}10\text{ million}) are non-tax revenue items.
Non-tax revenue comprises funds collected from administrative charges, user fees, and penalties rather than compulsory tax levies.
2
Sum the non-tax revenue receipts
₦12 million+₦8 million+₦10 million=₦30 million\text{₦}12\text{ million} + \text{₦}8\text{ million} + \text{₦}10\text{ million} = \text{₦}30\text{ million}
Tenement rates represent tax revenue (property tax) and are excluded from the non-tax total.

Key Concept

Distinction Between Tax and Non-Tax Revenue Sources
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