Income received from tax and non- tax source is known as government revenue. Government has different responsibilities in modern social welfare states. To perform all these functions, it should have income. Government collects income from tax sources i.e. direct + indirect tax and non-tax sources i.e. fine, fees, royalty, interest, dividends, etc. Sources of government revenue: 1. Tax sources: It is levy imposed by the government on the income wealth and capital gains of persons as well as business. It is a compulsory payment which has no direct benefit provided for the tax payer. Taxes are used to raise revenue of the government as a means of spending in the development of the economy. It may be divided into two headings: a. Direct tax: Tax imposed by government on the income, wealth and capital gains of persons and business (i.e. profit) is known as direct tax. The impact and incidence both of direct tax lay on same ...
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