PUBLIC FINANCE AND TAXATION REVISION KIT
REVISION KIT0728776317PUBLIC FINANCE AND TAXATIONPUBLIC FINANCEAND TAXATIONREVISION KITMASOMO MSINGI PUBLISHERSThis book contains eleven (11) past examination questions and suggested solutions
REVISION KITCPA0728776317PUBLIC FINANCE AND TAXATIONPUBLIC FINANCE ANDTAXATIONPART ICPA SECTION 2REVISION KITPAST EXAMINATION PAST PAPERS WITHSUGGESTED ANSWERSUpdated with November 2019 Examination Past paperwww.masomomsingi.co.keContact: 0728 776 317Page 1
REVISION KIT317PUBLIC FINANCE AND TAXATION0728776INTRODUCTIONFollowing our continued effort to provide quality study and revision materials at anaffordable price for the private students who study on their own, full time and part timestudents, we partnered with other team of professionals to make this possible.This Revision kit (Questions and Answers) contains kasneb past examination past papersand their suggested answers as provided by a team of lecturers who are experts in theirarea of training. The book is intended to help the learner do enough practice on how tohandle exam questions and this makes it easy to pass kasneb exams.Special appreciation and recognition to the lecturers who have helped in the developmentof our materials, These are: FA Kegicha William Momanyi (MBA Accounting, CPA,CISA and CCP), FA Bramwel Omogo (B.sc Actuarial Science, CIFA, CIIA final leveland ICIFA member), Johnmark Mwangi (MSc Finance, CPAK, BCom Finance), CPAGregory Mailu (Bsc. Economics) CPA Dominc Rasungu and CPA Lawrence Ambunyaamong others.www.masomomsingi.co.keContact: 0728 776 317Page 2
60728PAPER NO. 6 PUBLIC FINANCE AND TAXATION317REVISION KIT77PUBLIC FINANCE AND TAXATIONGENERAL OBJECTIVEThis paper is intended to equip the candidate with knowledge, skills and attitudes thatwill enable him/her to comply with and implement public financial managementregulations and compute taxes for various entities.6.0LEARNING OUTCOMESA candidate who passes this paper should be able to: Comply with the regulatory framework in public financial management (PFM)Compute tax for various entitiesManage the budgetary process, public revenue and control public expenditure innational and county governmentsApply the written tax law in addressing various tax issuesManage non-complex public financial management issues in public entities.CONTENT6.1 Introduction to public financial management-Nature and scope of public financeGeneral overview of public financial management as envisaged by theConstitutionRole of the national and county treasuriesOverview of the Public Financial Management ActFinancial regulationsTreasury circulars; meaning and applicationProcess of developing national and county government finance billsRole of budget officers in budget preparation and executionResponsibilities of the national and county treasuries in relation to budgetpreparationBudget process for both national, county and public entities6.2 Establishment of public funds in the public sector-Provision of establishing public fundsRationale of creation of public fundsThe Consolidated Fundwww.masomomsingi.co.keContact: 0728 776 317Page 3
3176The establishment and administration of contingency fundsThe establishment and administration of equalisation fundsCounty revenue sources77-REVISION KIT0728PUBLIC FINANCE AND TAXATION6.3 Supply chain management in public entities-Definitions and terminologiesGeneral overview of Public Procurement and Disposal (PPD) ActProcurement guidelines as envisaged by PPD ActCommittees responsible for procurementProcurement process by National, County and other public entitiesTendering process and selection of suppliers in public sectorConcept of e-procurement6.4 Oversight function in public finance management-The role of National AssemblyThe role of SenateThe role of County AssemblyThe role of Internal AuditRole of Controller of Budget in relation to disbursement of public funds asenvisaged by the Constitution and PFM Act, 20126.5 Introduction to taxation-History of taxationTypes of taxationPrinciples of an optimal tax systemSingle versus multiple tax systemsClassification of tax systemsTax shiftingFactors that determine tax shiftingTax evasion and tax avoidanceTaxable capacityFiscal policiesThe Revenue Authority; history, structure and mandate6.6 Taxation of income of persons-Taxable and non-taxable personsSources of taxable incomeswww.masomomsingi.co.keContact: 0728 776 317Page 4
677Employment income: Taxable and non-taxable benefits Allowable and non-allowable deductions Tax credits (withholding tax, personal and insurance relief, others) Incomes from past employment317REVISION KIT0728PUBLIC FINANCE AND TAXATIONBusiness income: Sole proprietorship Partnerships (excluding conversions) Incorporated entities (excluding specialised institutions) Turnover tax/presumptive tax- Income from use of property-rent and royalties- Farming income- Investment incomeMiscellaneous taxes and other revenues Stamp duty Catering levy Motor vehicle advance tax Capital gains tax6.7 Capital deductions-Rationale for capital deductionsInvestment deductions: ordinary manufacturersIndustrial building deductionsWear and tear allowancesFarm works deductionsShipping investment deductionOther deductions6.8 Administration of income tax-Registration and deregistration of tax payersAssessments and returnsOperations of PAYE systems: Preparation of PAYE returns, categories ofemployeesStatutory deductions (NSSF and NHIF)Notices, objections, appeals and relief for mistakeswww.masomomsingi.co.keContact: 0728 776 317Page 5
3176Tax decisions; objections and appealsCollection, recovery and refund of taxesAdministrative penalties and offencesApplication of ICT in taxation: iTax77-REVISION KIT0728PUBLIC FINANCE AND TAXATION6.9 Administration of value added tax-Introduction and development of VATRegistration and deregistration of businesses for VATTaxable and non taxable suppliesPrivileged persons and institutionsVAT ratesVAT recordsValue for VAT, tax pointAccounting for VATVAT returnsRemission, rebate and refund of VATRights and obligations of VAT registered personChanges to be notified to the commissionerOffences fines, penalties and interestEnforcementObjection and appeals: Requirements and procedure6.10 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 system6.11 Emerging issues and trendwww.masomomsingi.co.keContact: 0728 776 317Page 6
REVISION KIT776317PUBLIC FINANCE AND TAXATIONPAGE0728CONTENTPart A: Past papers1. November 2019 .92. May 2019 . 193. November 2018 . 284. May 2018 . . 355. November 2017 . 446. May2017 . . 527. November 2016 . 598. May 2016 . . 679. November 2015 . 7310. September 2015 . 7811. May 2015 . .85PART B: Suggested answers and solutions:1. November 2019 . 932. May 2019 . .1053. November 2018 .1164. May 2018 . .1255. November 2017 . 1376. May 2017 . 1477. November 2016 .1578. May 2016 . .1689. November 2015 . .18110. September 2015 .19111. May 2015 . .198www.masomomsingi.co.keContact: 0728 776 317Page 7
REVISION KIT317PUBLIC FINANCE AND TAXATION0728776RATES OF TAX (Including wife's employment, self-employment and professionalincome rates of tax)Year of income 2018.Monthly taxable xcess over47,059Annual taxable 64,709Excess over 564,709Rate of tax% in each Sh.10%15%20%25%30%Personal relief Sh.1,408 per month (Sh.16,896 per annum).Prescribed benefit rates of motor vehicles provided by employerMonthly rates Annual rates(i) Saloons, Hatch Backs and Estates(Sh.)Up to1200 cc3,60043,20012011500 cc4,20050,40015011750 cc5,80069,60017512000 cc7,20086,40020013000 cc8,600103,200Over3000 cc14,400172,800Capital allowance:Wear and tear allowance:Class I37.5%Class II30%Class III25%Class IV12.5%Software20%Industrial building allowance:Up to 2009From 1 January 2010HotelsHostels/Education/Film producersBuildingsFrom 1 January 2010 Commercialbuilding:(Shop, office or showroom)Farm works allowanceInvestment deduction allowance2.5%10%10%100%25%100% (ii) Pick-ups, Panel Vans (unconverted)100%Up to1750 ccOver1750 cc100%(iii) Land Rovers/CruisersShipping investment deduction(Ships over 125 tonnes)Extraction expenditure:Written off over 5 years (20%)Commissioner's prescribed benefit ratesServices(i) Electricity (Communal or from a generator)(ii) Water (Communal or from a borehole)Agriculture employees: Reduced rates of benefits(i) Water(ii) 0,4007,20086,400Monthly rates(Sh.)1,500500Annual rates(Sh.)18,0006,0002009002,40010,800Contact: 0728 776 317Page 8
REVISION KIT317PUBLIC FINANCE AND TAXATION776CPA PART I SECTION 20728CS PART I SECTION 2CIFA PART I SECTION 2CCP PART I SECTION 2PUBLIC FINANCE AND TAXATIONTHURSDAY: 28 November 2019.Time Allowed: 3 hours.Answer ALL questions. Marks allocated to each question are shown at the end ofthe question. Show ALL your workings. Any assumptions made must be clearly andconcisely stated.QUESTION ONE(a) Summarise five roles of the County Assembly in public finance management.(5 marks)(b) Propose five sources of revenue for county governments.(5 marks)(c) Outline the stages to be followed in the budget process for the National Governmentin any financial year.(10 marks)(Total: 20 marks)QUESTION TWO(a) Identify three ad hoc committees that a county procuring entity could establish toensure that procurement and asset disposal is done in accordance with the CountyGovernments Procurement Regulations.(3 marks)(b) Discuss five roles of the National Treasury in relation to procurement and assetdisposal as outlined in the Public Procurement and Asset Disposal Act.(5 marks)(c) The following are summaries of the details of the sales day book, purchases day bookand the cash book of Kamata Ltd. for the month of December 2018:Sales Day BookDateDecember 4714DetailsMwangaza Ltd.J. KamauHazina Enterprises unt (Sh.)650,000520,000350,000Contact: 0728 776 317Page 9
DateDecember 161227Purchases Day BookDetailsFolioJawabu Enterprise2004Sonytec Ltd. (imports) 2006N. Kaluma2007B. Salama2008Total170,0001,690,000Amount (Sh.)300,000420,000200,000180,0001,100,000DRDate DetailsDec5 SalesCash BookCashBankDate DetailsSh.Sh.Dec960,000 450,0002 Salaries andwages15 Receipt from 800,000 4,200,0004 Cateringdebtorsexpenses5 Purchases7 Furniture9 Electricity14 Photocopying22 Refund tocustomers301,760,000 4,650,00031710056Ministry of SportsTotal7720REVISION KIT0728PUBLIC FINANCE AND TAXATIONBalance 60,00032,00024,000176,0001,004,000 1,874,0001,760,000 4,650,000Additional information:1. J. Kamauwas declared bankrupt on 18 December 2018 after having paid Sh.400,000for the goods purchased on 7 December 2018.2. Ten per cent of the purchase from Jawabu Enterprises were returned by the companydue to poor quality.3. Credit notes amounting to Sh.280,000 were issued to customers during the month.4. Refund to the customers in the cashbook relates to the excess amounts paid on cashsales.www.masomomsingi.co.keContact: 0728 776 317Page 10
REVISION KITNOVEMBER 2019770728SUGGESTED ANSWERS AND SOLUTIONS6317PUBLIC FINANCE AND TAXATIONQUESTION ONEa) Summary of the five roles of the county assembly in public finance management Monitor adherence by the governor to the principles of public finance set out inthe constitution. Approves the budget estimates for the county government, urban areas and cities; Provides overall oversight over public finances at the county government level Approves the establishment of other county public funds Approves county fiscal strategy paper (CFSP) and county budget review andoutlook paper (C-BROP) Reviews and approves the annual budget estimates for the county government Discuss and review the budget policy statement and budget estimates and makerecommendations to the county government. Provide general direction on budgetary matters at county level. Observe the principle of public participation in public finance management atcounty level. Reviews the Fiscal strategy paper and makes recommendations to the countyexecutive committee;b) Sources of revenue for country governmentsi. Aid and grants: This are given by the national government, and other bilateraldonors and international financial institution like world bankii. Fees paid by citizen for services rendered like garbage collection and parking fees.iii. Revenue from natural resources like game parks, game reserves and nationalparks.iv. Fines and penalties for offender and violates of county government by laws.v. Borrowing from national government and externally from organization such asIMF and World Bank.www.masomomsingi.co.keContact: 0728 776 317Page 93
REVISION KIT0728776c) An outline of the stages to be followed in the budget process for the nationalgovernment in any financial year.317PUBLIC FINANCE AND TAXATIONThe budget process for the national government in any financial year comprises of thefollowing stages:i)Integrated development planning process which includes both long term andmedium – term planningii) Planning and determining financial and economic policies and priorities at thenational level over no medium term planning.iii) Preparing overall estimates in the form of the budgets policy statement of nationalgovernment revenues and expenditures.iv) Adoption of budget policy statement by parliament as a basis for futuredeliberations.v) Preparing budget estimates for the national government.vi) Submitting estimates to the national assembly for approval.vii) Enacting the appropriation bill and any other bills required to implement theNational governments budgetary prop0osals.viii) Implementing the approved budget.ix) Evaluating and accounting for, the national governments budgeted revenues andexpendituresx) Reviewing and reporting on budgeted revenues and expenditures every threemonthsQUESTION TWOa) Ad hoc committees that a county procuring Entity could establish to ensure thatprocurements and asset disposal is due in accordance with the countygovernments procurement regulations. Disposal committee - it recommends the best method of disposal of unserviceableassets Tender committee – it conduct technical and financial evaluation of tendersevaluation if tenders Tender opening committee – responsible for opening tenders received andselling procedures to be followed during tender opening. Tender evaluation committee; Negotiation committee; andwww.masomomsingi.co.keContact: 0728 776 317Page 94
PUBLIC FINANCE AND TAXATION REVISION KIT www.masomomsingi.co.ke Contact: 0728 776 317 Page 3 PAPER NO. 6 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 comply with a
Taxation Law 1 Taxation Law 2 I. General Principles of Taxation II. National Internal Revenue Code of 1997 as amended (NIRC) I. General Principles of Taxation A. Definition and Concept of Taxation B. Nature of Taxation C. Characteristics of Taxation D. Power of Taxation Compared E. Purpose of Taxation .
3. Two basic concepts of pension taxation: CIT and EIT Part II: The Taxation of Cross-Border Pensions: Issues and proposal (Genser) 4. The state of cross-border taxation of pensions 5. The double fairness dilemma of back-loaded pension taxation –for countries and individuals 6. The proposal: Front-loading taxation under three payment options
Griffith University BB13A11 Taxation 2 CTA2 Advanced Griffith University LAW3103G Taxation law CTA2 Advanced ICAA Various Taxation, or Taxation and financial reporting CTA2 Advanced James Cook University CO3504 Taxation II CTA2 Advanced La Trobe University ATA3 Advanced taxation 3 CTA2 Advanced La Trobe Univ
Prepared for District 5 Toastmasters By Mark Kramer, DTM Original Version July 2007 1st Revision June 2008 2nd Revision November 2008 3rd Revision June 2009 4th Revision May 2010 5th Revision May 2011 6th Revision May 2012 7th Revision May 2013 8th Revision May 2014 9th Revision Nov
principles of taxation. PUBLIC FINANCE Public finance deals with the rising up of revenue and incurring expenditure by the public authorities. Dalton defines public finance as the science that is concerned with the income and expenditure of public authorities and the adjustment of one to
PRINCIPLES OF PUBLIC FINANCE AND TAXATION www.someakenya.com Contact: 0707 737 890 Page 7 Public finance is composed of the following constituents public: Expenditure Revenue Debt ( Financial ) administration Private finance is the study of the income, debt and expenditure of File Size: 429KB
PUBLIC FINANCE AND TAXATION www.someakenya.com Contact: 0707 737 890 Page 2 CONTENT 1. Introductions to public financial management - Nature and Scope of Public Finance - General overview of public financial management as envisaged by the constitution - Responsibility of National and County Tre
5.1 Before accepting the appointment or as soon as the relevant facts are known, the arbitrator will disclose to the parties any actual or potential conflict of interest or any matter that might give rise to justifiable doubts as to his or her impartiality. 5.2 In the event of such disclosure, the parties, or either of them (as appropriate), may waive any objection to the arbitrator continuing .
