Differences between tax and fees:

 Differences between tax and fees

1.

 tax is a compulsory contribution made by a taxpayer. A fee, by definition, is a voluntary payment.

2.

 as far as tax is concerned, there is no direct give-and-take relationship between the taxpayer and the tax-levying authority.

A taxpayer cannot demand any special favour from the authority in return for taxes paid by him. A fee is a direct payment by those who receives some special advantages or the government guarantees the services who pays fees. Fees are, therefore, deemed to be the by-products of the administrative activities of the government.

3.

 fees are mostly imposed to regulate or control various types of activities. But the objectives of taxation are many. It has no separate objective. Taxes are levied in the greater interests of the country.

4

A tax is a levy collected for general government services.

A fee is levy collected to provide a service that benefits the group of people from which the money is collected.