Principles of Public Finance and Taxation – KASNEB Syllabus

PAPER NO. 11 PRINCIPLES OF PUBLIC FINANCE AND TAXATION

GENERAL OBJECTIVE

This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable him/her to apply principles of public financial management and taxation in practice.

LEARNING OUTCOMES

A candidate who passes this paper should be able to:

  • Comply with the regulatory framework in public financial management (PFM)
  • Compute tax for various entities
  • Manage the budgetary process, public revenue and control public expenditure in national and county governments
  • Apply the written tax law in addressing various tax

CONTENT

Introduction to Public Financial Management Legal Framework

  • General overview of Public Financial Management as envisaged by the Constitution( Chapter 12 of the constitution)
  • Financial regulations
  • Treasury Circulars
  • Process of developing county government finance bills

Public budget process for public bodies

  • General definition of budgets terms
  • Role of budget officers in budget preparation and execution
  • Responsibilities of The National and County treasury’s in relation to budget preparation
  • Budget process for both national, county and Public entities
  • Budgetary and fiscal policy tools

Oversight function in public finance management

  • The role of National Assembly
  • The role of Senate
  • The role of County Assembly
  • The role of Auditor General
  • The role of Internal Audit
  • Role of Controller of Budget in relation to disbursement of public funds as envisaged by the Constitution and PFM Act, 2012

Introduction to taxation

  • History of taxation
  • Types of taxation
  • Principles of an optimal tax system
  • Single versus multiple tax systems
  • Classification of tax systems
  • Tax shifting
  • Factors that determine tax shifting
  • Tax evasion and tax avoidance
  • Taxable capacity
  • Fiscal policies
  • Revenue authority –history ,structure and mandate

Taxation of income of persons         

  • Sources of taxable incomes
  • Meaning of residence
  •  Significance of residence
  • Withholding tax

Employment Income:

  • taxable and non taxable employment benefits
  • allowable deductions against employment income
  • taxation of employment income
  • tax credits against gross tax

Business Income

  • definition of business
  • circumstances under which taxable business income is deemed to have accrued.
  • reasons why accounting profit and taxable profits are different
  • taxation of sole proprietorship, partnership and incorporated entities

Other incomes

  • royalties
  • rental
  • farming
  • investment (interest and dividends)
  • pension income

Turnover tax

  • rationale behind introduction of turnover tax
  • incomes exempted from turnover tax
  • payment of turnover tax
  • benefits of turnover tax

Capital deductions      

  • Rationale for capital deductions
  • Investment deductions
  • Industrial building deductions
  • Wear and tear allowances
  • Diminution in value
  • Farm works deductions

Administration of income tax 

  • Overview of the income tax act
  • Identification of new tax payers
  • Assessments and returns
  • Operations of PAYE systems: Preparation of PAYE returns, categories Of employees
  • Notices, objections, appeals and relief of mistake
  • Appellant bodies
  • Collection, recovery and refund of taxes
  • Offences, fines, penalties and interest
  • Application of ICT in business; iTax, simba system

Administration of value added tax      

  • Introduction and development of VAT
  • Registration and deregistration of businesses for VAT
  • Taxable and non taxable supplies
  • Privileged persons and institutions
  • VAT rates
  • VAT records
  • Value for VAT, tax point
  • Accounting for VAT
  • VAT returns
  • Remission, rebate and refund of VAT
  • Changes to be notified to the commissioner
  • Offences fines, penalties and interest
  • Enforcement
  • Objection and appeals: Requirements and procedure

Customs taxes and excise taxes

  • Customs procedure
  • Import and export duties
  • Prohibitions and restriction measures
  • Transit goods and bond securities
  • Excisable goods and services
  • Goods subject to customs control
  • Circumstances under which duty may be refunded
  • Purposes of customs and excise duties

Emerging issues and trends



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