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Question

Difficulty: EasySources of Government Revenue

Which of the following represents a non-tax recurrent source of revenue for the government?

  1. Court fines and drivers' license feesAnswer
  2. B
    Value Added Tax collected on luxury goods
  3. C
    Proceeds from the sale of government-owned real estate
  4. D
    Companies Income Tax paid by private corporations

Answer

Court fines and drivers' license fees represent a non-tax recurrent source of revenue for the government.
Court fines and drivers' license fees are non-tax recurrent revenue sources because they arise from government administrative services and regulatory activities rather than compulsory tax levies or asset liquidations.

Step-by-Step Solution

1
Identify the categories of government revenue.
Government revenue is classified into tax revenue (direct and indirect taxes), non-tax recurrent revenue (fees, fines, licenses, earnings from government services), and capital receipts (asset sales, loans).
Understanding the broad classification helps isolate non-tax revenue streams.
2
Analyze court fines and license fees.
Fines and license fees are regular, ongoing payments collected for administration and regulatory adherence, without being a compulsory percentage tax on income or expenditure.
These administrative receipts constitute recurrent non-tax revenue.

Key Concept

Recurrent Non-Tax Revenue
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Topics

Sources of Government Revenue

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