CPA Section 2 – Public Finance and Taxation (KASNEB)

About Course

This unit 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.

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.

Course Content

Introduction to Public Financial Management
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
Establishment of public funds in the public sector

Supply Chain Management in Public Entities
Supply chain management in public entities

Oversight Function in Public Finance Management
Oversight function in public finance management

Introduction to Taxation
Introduction to taxation

History of taxation

02:25:36
Types of taxation

02:25:37
Principles of an optimal tax system

02:25:37
Single versus multiple tax systems

02:25:37
Classification of tax systems

02:25:37
Tax shifting

02:25:37
Factors that determine tax shifting

02:25:37
Tax evasion and tax avoidance

02:25:37
Taxable capacity

02:25:37
Fiscal policies

02:25:37
The Revenue Authority; history, structure and mandate

02:25:39

Taxation of Income of Persons
Taxation of income of persons

Sources of taxable incomes

46:46
Employment income

21:11
Taxable and Non-taxable Benefits

25:33
Allowable and non-allowable deductions

21:11
Business income
Taxation of sole proprietorship

38:20
Partnerships (excluding conversions)

16:22
Income from use of property-rent and royalties

19:09
Farming income

16:07
Investment income
Miscellaneous taxes and other revenues

Capital Deductions
Capital deductions

Administration of Income Tax
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

Administration of Value Added Tax
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
Rights and obligations of VAT registered person
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 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)
Offences and penalties
Excisable goods management system

CPA Section 2 – Public Finance and Taxation (KASNEB)

About Course

What Will You Learn?

Course Content

Introduction to Public Financial Management 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 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 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 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 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 Taxation of income of persons

Sources of taxable incomes

Employment income

Taxable and Non-taxable Benefits

Allowable and non-allowable deductions

Business income

Taxation of sole proprietorship

Partnerships (excluding conversions)

Income from use of property-rent and royalties

Farming income

Investment income

Miscellaneous taxes and other revenues

Capital Deductions 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 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

Administration of Value Added Tax Administration of value added tax