Non-tax revenue
Public finance |
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Non-tax revenue or non-tax receipts are government revenue not generated from taxes.
Examples
- Rents, concessions, and royalties from private firms (often from leases for developing natural resources on public land)
- User fees collected in exchange for the use of many public services and facilities. Tolls charged for the use of toll roads are an example
- Fees for the granting or issuance of permits or licenses. Examples include:
- vehicle registration plate permits or vehicle registration fees
- watercraft registration fees
- building fees
- driver's licenses
- hunting and fishing licenses
- fees for professional licensing
- fees for visas or passports
- fees for demolition, rezoning, and land grading[a]
- less often, fees for increasing stormwater runoff, destroying native vegetation, or cutting-down healthy trees
- Fines collected and assets forfeited as a penalty. Examples include parking fines, court costs levied on criminal offenders, and civil forfeiture
- Aid from abroad (foreign aid)
- Aid from another level of government (intragovernmental aid); in the United States, federal grants may be considered non-tax revenue for the receiving states, and equalization payments
- Loans, or other borrowing, from monetary funds and/or other governments
- Tribute or indemnities paid by a weaker state to a stronger one, often as a condition of peace after suffering military defeat. The war reparations paid by the defeated Central Powers after the First World War offer a well-known example.
- Revenue from profitable state-owned enterprises
- Revenue from investment funds, sovereign wealth funds, or endowments
- Revenue from sales of state-owned assets
- Donations and voluntary contributions to the state
Global distribution and volume
Vis-à-vis tax revenues, much less academic study has been conducted into the volume and distribution of non-tax revenues,[2] although the most significant forms — oil and natural gas revenues and foreign aid — have been extensively studied since Hossein Mahdavy’s seminal 1970 analysis of the Imperial State of Iran.[3]
Twenty-first century studies show that non-tax revenue in petrostates can reach up to 80 percent of Gross Domestic Product and over 90 percent of total government revenue.[4] In resource-poor nations — excluding those gaining strategic rents due to geography or perceived need for aid — non-tax revenues are typically around 10 percent of total government revenue.
Volatility
Non-tax revenues fluctuate much more from one year to another than taxes — three times as much in the European Union,[5] and slightly less than that for the globe as a whole.[6] Indeed, their value is correlated with changing economic circumstances, repayments and interest on loans may be renegotiated, a record fine in the field of competition can significantly vary the profits of fines and penalties. Moreover, some years are marked by exceptional events: for example, in France in 2012, the sale of "4G" radio frequencies resulted in the collection of nearly €1.3 billion in non-tax revenues.[7]
Effects
The presence of large non-tax revenues — invariably from non-renewable natural resources, foreign aid, or strategic rents like those associated with the Suez Canal — has been shown to make democratisation much less possible.[4] This is generally argued to be because large non-tax revenues weaken the links between state and society and facilitate government investment in repression and patronage,[8] and also because the presence of large non-tax revenues leads to less redistribution of wealth.[2]
Notes
References
- ^ Martin, James (May 1972). "Land Grading: A Pollution Stopper". Soil Conservation: 224–225.
- ^ a b Morrison, Kevin M. (October 24, 2006). Oil, Non-Tax Revenue, and the Redistributional Foundations of Regime Stability. Duke University Seminar on Global Governance and Democracy. Duke University.
- ^ See Mahdavy, Hossein (1970). "The Patterns and Problems of Economic Development in a Rentier Stare: The Case of Iran". In Cook, Michael A. (ed.). Studies in Economic History of the Middle East. London: Oxford University Press.
- ^ a b Prichard, Wilson; Salardi, Paola; Segal, Paul (September 2018). "Taxation, non-tax revenue and democracy: New evidence using new cross-country data". World Development. 109: 295–312.
- ^ Mourre, Gilles; Reut, Adriana (7 June 2018). "Non-tax revenue in the European Union: A source of fiscal risk?". Policy Watch. 26: 198–223.
- ^ Ossowski, Rolando; Gonzáles, Alberto (2012). Manna from heaven: The impact of nonrenewable resource revenues on other revenues of resource exporters in Latin America and the Caribbean (PDF) (Report). Inter-American Development Bank. p. 17.
- ^ "Les recettes non fiscales". Fourum dela performance. Archived from the original on 6 January 2017.
- ^ Ross, Michael (2001). "Does Oil Hinder Democracy". World Politics. 53 (3): 325–361.