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Modern states have to perform multifarious duties for promoting the welfare of their citizens. For the performance of these functions, money is needed. Every government, therefore, tries to meet its annual expenditure from taxes and from the sources other than the taxation. The main sources of public or government revenue and their examples can be classified under the following heads:

(i) Revenue from private income: A government derives revenue from citizens by taxation and from other non-tax sources such as fees, prices, special assessment rates, etc.

(ii) Irregular revenue: Under this heading, we can include all items such as gifts, penalties, war indemnities, etc.

(iii) Revenue from state ownership: A government also obtains income from the different assets which it owns. For example, government receives money from state buildings, crown lands, and other productive enterprises such as railways, postal service, canals, etc.