KASNEB CAMS – Elements of Taxation Notes

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This paper is intended to equip the candidate with the requisite knowledge, skills and attitudes to apply the principles of public finance and administration and perform basic tax computations.


A candidate who passes this paper should be able to:

  • Explain the nature and operations of public financial management (PFM)
  • Apply basic principles of public finance and administration
  • Comply with basic legislative provisions in procurement of supplies and services
  • Compute simple taxes and prepare basic tax returns for individuals and small entities


Role of various arms of Government

  • The Executive: The President, Deputy President, Cabinet,
  • Director of Public Prosecutions, Principal Secretaries, Chief Administrative Secretaries
  • The Judiciary
  • The Legislature (including oversight committees on public finance)
  • National and County Governments and their relationship
    Constitutional Commissions and Independent Offices
  • Public Service Commission (PSC) and County public service boards.

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Legal framework on public financial management

  • General overview of public financial management as envisaged by the Constitution
  • Overview of the Public Financial Management Act (elementary knowledge only):
    • The National Treasury: Responsibilities, powers, relationship with County Treasuries, management of the Consolidated
    • Fund, Contingencies Fund, Equalisation Fund, other funds
      County governments: County treasuries, Revenue funds, the
    • County Executive Committee members for Finance
    • Budget preparation process at national and county levels
    • Role of other officers at national and county levels; accounting officers, receivers and collectors of revenue
    • Annual financial reports at national and county levels (nature and content only, excluding preparation)
    • Public Sector Accounting Standards Board (PSASB) (establishment and functions only)

Role of other institutions in PFM

  • The Auditor General
  • Controller of Budget
  • Council of Governors
  • Kenya Revenue Authority (KRA) – structure, mandate and functions
  • Other State Corporations
  • Commission on Revenue Allocation (CRA)
  • Public Debt Management office

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Supply chain management in public entities (elementary knowledge)

  • Definitions and terminologies
  • General overview of Public Procurement and Disposal (PPD) Act:
    • Bodies involved in the regulation of public procurement and asset disposal
    • Responsibilities of County governments in public procurement and asset disposal
    • Compliance by procuring entities; Role of accounting officers, procurement committees
    • General procurement principles
    • Methods of procurement
    • Offences and penalties
    • The concept of e-procurement

Introduction to taxation

  • Purposes of taxation
  • Principles of an optimal tax system
  • Single versus multiple tax systems
  • Classification of taxes and tax rates
  • Types of taxes

Tax computations (basic level)

  • Taxable and non taxable persons
  • Sources of taxable income
  • Tax on employment income, PAYE, personal reliefs, other reliefs
  • Business income:
  • Sole proprietorships
  • Partnerships (excluding realignments and conversions)
  • Incorporated entities
  • NGOs
  • Farming income
  • Types of capital deductions (without computations)

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Administration of income tax

  • Types of assessments and returns
  • Notices, objections, appeals and relief of mistake
  • Appellant bodies
  • Collection, recovery and refund of taxes
  • Offences, fines, penalties and interest
  • Application of ICT in taxation: iTax, other tax management systems

Administration of value added tax (basic level)

  • Registration and deregistration of businesses for VAT
  • Taxable and non taxable supplies
  • Privileged persons and institutions
  • VAT rates and computations
  • VAT records
  • VAT returns
  • Remission, rebate and refund of VAT
  • Rights and obligations of VAT registered person
  • Offences, fines, penalties and interest
  • Enforcement
  • Objection and appeals: Requirements and procedure

Emerging issues and trends

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