Download Public Finance and Taxation Notes
CPA INTERMEDIATE LEVEL NOTES
GENERAL OBJECTIVE
This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable him/her to comply with and implement public financial management regulations and compute taxes for various entities.
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 issues
- Manage non-complex public financial management issues in public entities.
CONTENT
Introduction to public financial management
- Nature and scope of public finance
- General overview of public financial management as envisaged by the Constitution
- Role of the national and county treasuries
- Overview of the Public Financial Management Act
- Financial regulations
- Treasury circulars; meaning and application
- Process of developing national and county government finance bills
- Role of budget officers in budget preparation and execution
- Responsibilities of the national and county treasuries in relation to budget preparation
- Budget process for both national, county and public entities
Establishment of public funds in the public sector
- Provision of establishing public funds
- Rationale of creation of public funds
- The Consolidated Fund
- The establishment and administration of contingency funds
- The establishment and administration of equalisation funds
- County revenue sources
Supply chain management in public entities
- Definitions and terminologies
- General overview of Public Procurement and Disposal (PPD) Act
- Procurement guidelines as envisaged by PPD Act
- Committees responsible for procurement
- Procurement process by National, County and other public entities
- Tendering process and selection of suppliers in public sector
- Concept of e-procurement
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
Download Public Finance and Taxation Notes
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
- The Revenue Authority; history, structure and mandate
Taxation of income of persons
- Taxable and non-taxable persons
- Sources of taxable incomes
- Employment income:
- Taxable and non-taxable benefits
- Allowable and non-allowable deductions
- Tax credits (withholding tax, personal and insurance relief, others)
- Incomes from past employment
- Business income:
- Sole proprietorship
- Partnerships (excluding conversions)
- Incorporated entities (excluding specialised institutions)
- Turnover tax
- Income from use of property- rent and royalties
- Farming income
- Investment income
- Miscellaneous taxes and other revenues
- Stamp duty
- Catering levy
- Motor vehicle advance tax
- Capital gains tax
Capital deductions
- Rationale for capital deductions
- Investment deductions: ordinary manufacturers
- Industrial building deductions
- Wear and tear allowances
- Farm works deductions
- Shipping investment deduction
- Other deductions
Administration of income tax
- Registration and deregistration of tax payers
- Assessments and returns
- Operations of PAYE systems: Preparation of PAYE returns, categories of employees
- Statutory deductions (NSSF and NHIF)
- Notices, objections, appeals and relief for mistakes
- Tax decisions; objections and appeals
- Collection, recovery and refund of taxes
- Administrative penalties and offences
- Application of ICT in taxation: iTax
Customs taxes and excise taxes
- Customs procedure
- Import and export duties
- Prohibitions and restriction measures
- Transit goods and bond securities
- Purposes of customs and excise duties
- Goods subject to customs control
- Import declaration form, pre-shipment inspection, clean report of findings
- Excisable goods and services
- Application for excise duty (licensing)
- Use of excise stamps
- Offences and penalties
- Excisable goods management system
public finance and taxation notes