Administrative Revenue

Administrative revenues are those receipts which arise because of the administrative function of the government. Receipts from fees, licenses, special assessment, fines, forfeitures, escheats, are included under administrative revenue.

Fees

According to Prof. Seligman, “Fee is a payment to defray the cost of each recurring services undertaken by the government, primarily in the public interest, but conferring a measurable special advantage on the fee payer.” This definition shows that a person pays the fee to get certain special service from the Govt. That means there is direct quid-pro-quo in case of fees. However the amount of fee paid may not be proportional to the benefits received. Court-fee, registration fee etc. are the examples of fees.

License Fees

License fee is a special case of fee and there is not much difference between the two. Prof. Lutz defines, “a license fee is paid in those instances in which the government confers permission or a privilege rather than some positive service”. When one pays a car license fee, he gets the permission to drive the car on the public road. Again if a person wants to sell wine, he must obtain a license and pays the license fee. Here the aim of the license fee collection is to regulate the harmful consumption.

Special Assessment

Special assessment is also called the betterment levy. It is a tax on the increase in the value of properties due to the implementation of a public project. Prof. Seligman defines special assessment as a “compulsory contribution, levied in proportion to the special benefits derived to defray the cost of a specific improvement to property undertaken in the public interest.”

When government undertakes any developmental activities like construction of highways or providing canal irrigation, the society as a whole gets the benefit but some people whose properties are nearby also get special benefit. The value of their properties rises. For example when irrigation is provided by the public authorities through canals, The value of land rises and productivity increases. The farmers who enjoy this privilege pay a tax to the Govt. This is known as special assessment.

Fines

Fines are penalties levied for the breach of law of the land. The aim of fines is not the collection of revenue but to deter people from violating law and committing crimes. This constitutes a very small proportion of public revenue. 

Forfeitures

These are also penalties imposed on those people who fail to fulfil certain legal obligation or charged with breach of contract. Penalties imposed by the court on a person for not appearing in the court of law is an example of forfeiture.

Escheats

The properties or estate of the people claimed by the state who die without legal heirs or without making a ‘will’ are known as escheats. The Govt. may also acquire unclaimed properties by the right of escheat.