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Question

Difficulty: EasySources of Government Revenue

Revenue derived by the government from the issuance of passports, driving licenses, and court charges is classified under which revenue category?

  1. Non-tax revenueAnswer
  2. B
    Direct tax revenue
  3. C
    Indirect tax revenue
  4. D
    Capital receipts

Answer

Non-tax revenue
Fees for services rendered by government organs (such as issuing driving licenses, passports, and court proceedings) represent non-tax recurrent revenue, as they are non-compulsory charges paid specifically for administrative permits and services.

Step-by-Step Solution

1
Identify the nature of government earnings from passport fees, driving licenses, and court charges.
These are payments made by individuals in exchange for specific administrative services or regulatory permits provided by government agencies.
Government recurrent revenue is split into tax revenue (compulsory levies on income/goods) and non-tax revenue (administrative fees, fines, licenses, and user charges).
2
Classify the item under standard public sector revenue categories.
Since these receipts are not taxes levied on wealth, income, or expenditure, they are correctly categorized as non-tax revenue.
Non-tax revenue covers all administrative fees, fines, penalties, and earnings from government commercial enterprises.

Key Concept

Classification of Government Recurrent Revenue into Tax and Non-Tax Sources
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Topics

Sources of Government Revenue

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